Asian markets on Monday have opened in red as Trump’s blockade threat triggered uncertainty on trading floors.
Japan’s equity benchmark Nikkei 225 fell by 0.9 per cent in early trade, while South Korea’s KOSPI declined more than 1 per cent.
Japan’s Nikkei share average slipped 1 per cent on Monday as the collapse of US-Iran peace talks and reports of a US Navy plan to block the Strait of Hormuz cast fresh doubts on the durability of an ongoing ceasefire.
The Nikkei 225 was trading at 56,357.40 as of the midday break, after recording its highest weekly gain in more than a year last week.
While the broader Topix declined 0.5 per cent in nervous trading to 3,721.78. The slide comes hours after US President Donald Trump announced that the US Navy would completely block the Strait of Hormuz for ships travelling to and from Iran.
The route is considered one of the most critical and strategic locations in terms of global trade, as it handles 20 per cent of the global oil and energy supplies.
A market analyst at the Japanese Tokai Tokyo-based intelligence firm, Shuutaro Yasuda, said, "I don’t think there are that many investors who expected everything to be agreed upon (at the weekend talks) and for everything to go smoothly.”
“That said, it’s obviously not good news, so stocks are falling. But I think the reason we’re not seeing a really extreme risk-off move is exactly that.”
Across the Tokyo Stock Exchange’s 33 industry sub-indexes, energy exploration stocks stood out with a 3.2 per cent gain. In contrast, electric power and gas and air transport each lost 1.8 per cent.
Besides, the disruption in supply has triggered an energy crisis situation in Asian countries, including Japan, South Korea, and India.
Also read: Asian markets slump as optimism on Iran-US ceasefire fades
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