Business · Malaysia Bureau
Regional stocks slip as Middle East tensions weigh on markets
Equity markets across South and Southeast Asia declined as geopolitical tensions in the Middle East persist, keeping crude oil prices elevated around US$90 per barrel. Traders warn that inflationary pressures are likely to remain above central bank targets for an extended period.
LSN Malaysia ·
Stock markets in the region experienced broad-based weakness as investors reassessed their outlook for the Middle East crisis and its implications for energy costs and inflation. The persistent tensions have kept crude oil prices anchored near the US$90 mark, preventing the significant relief that traders had earlier hoped would materialise.
Market participants remain concerned about the stubborn nature of inflationary pressures across the region. Central banks have signalled their intention to maintain elevated interest rates for longer than previously anticipated, as inflation continues to exceed their target bands. The combination of geopolitical uncertainty and sustained energy costs is expected to keep price growth elevated in coming months.
Analysts point to the dual headwinds facing regional economies. While some markets had anticipated a resolution to Middle East tensions that would ease oil prices and inflation, the ongoing situation has forced a reassessment. This has prompted investors to take a more cautious stance, with many rotating away from equities in favour of fixed-income assets offering better risk-adjusted returns amid higher interest rate environments.
The outlook remains contingent on developments in the Middle East and the trajectory of global energy markets. Until there are clear signs of de-escalation or alternative supply arrangements, traders expect crude prices to remain volatile and inflation to persist above comfort levels for regional policymakers.