Geopolitical turmoil in the Middle East resulting from the escalating armed conflict between the United States and Iran has begun to pressure global financial markets. In Thursday's trading (16/7/2026), the majority of Asian stock markets tumbled into the red, triggered by a mass sell-off of technology and artificial intelligence (AI) stocks. On the other hand, global crude oil prices ticked slightly lower but remained elevated due to concerns over disruptions to the global energy supply chain.

The deepest correction was experienced by South Korea's market, where the Kospi index plunged significantly by 6.6 percent to 6,816.70. This decline was compounded by the Bank of Korea's decision to raise its benchmark interest rate to curb inflationary pressures stemming from the Middle East conflict. Shares of semiconductor giants SK Hynix and Samsung Electronics fell sharply by 11.2 percent and 8.2 percent, respectively. Meanwhile, Taiwan's Taiex index also edged down 0.3 percent ahead of the earnings release from global chipmaker TSMC.

This negative sentiment also spread to the Japanese market, with the Nikkei 225 index slipping 2.9 percent to reach 66,767.64. Shares of memory chipmaker Kioxia plummeted 13.5 percent, followed by Tokyo Electron, which weakened by 5.2 percent, and investment giant SoftBank Group, which slid 6.4 percent.

Contrary to the regional weakening trend, Hong Kong's Hang Seng index managed to strengthen by 1.7 percent to 25,111.22. This surge was supported by a 4.4 percent appreciation in Alibaba shares, following Chinese regulators' approval for the use of the Apple Intelligence feature, which will integrate Alibaba's Qwen AI model.

In the commodity market, Brent crude oil prices fell slightly by 0.4 percent to USD 84.55 per barrel, while West Texas Intermediate (WTI) crude weakened by 0.2 percent to USD 79.34 per barrel. Commodity analysts warned that oil prices remain vulnerable to spikes as armed tensions begin to disrupt tanker traffic in the Strait of Hormuz, a crucial route for global oil distribution.

The situation in Asia contrasted with Wall Street, which closed higher in the previous session thanks to quarterly earnings reports from major issuers that exceeded market estimates. Meanwhile, in the foreign exchange market, the US dollar was seen weakening slightly against the Japanese yen to around 162.09 yen.