Oil surged on Monday while Asian equities slumped as the growing conflict in the Middle East intensified concerns over petroleum supply disruptions and rising inflation in the region.
If the Strait of Hormuz remains effectively closed for a prolonged period, Asian countries such as the Philippines could be "disproportionately hit," MUFG Bank said in a research report.
China A50 Index has dropped by roughly 5.7% so far this year. The government said Friday it would boost spending in major infrastructure and public services to help meet economic growth target.
Despite resilient exports amid tariffs, a worsening geopolitical backdrop is creating more uncertainty for exporters and supply chains, commerce minister Wang Wentao said at the same press conference.
EM equity funds have posted steep declines this month as investors cut exposure to risk assets amid the escalating Iran conflict, making them among the worst performers across asset classes.
But Goldman Sachs said that if the disruption proves short-lived, the broader earnings impact may remain limited, and maintained its forecast for 25% growth in MSCI EM EPS in 2026.
A50 followed global markets lower, with 200 SMA turning into a resistance. Given a breach of support of 14,263 – the low hit in October, the index may well ease further towards 14,100.
Asset recap
As of market close on 6 March, among EBC major products, US West Texas Oil led gains. Iran named Mojtaba Khamenei its new Supreme Leader on Sunday, which is unacceptable to Israel.
Xpeng's surprising jump appears tied to renewed positioning ahead of its upcoming quarterly results, which can reset expectations around margins, cash burn, and 2026 profitability.
A collapse in smartphone demand is compounding geopolitical anxiety for chip stocks, with the sector's equipment makers caught in the crossfire. Lam Research was among the biggest losers.
EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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