Asian Stocks Slide as Iran Conflict Keeps Oil Near $100 📉

The escalation of the war involving Iran, the U.S., and Israel continues to rattle global markets, driving energy costs up and crushing expectations for central bank rate cuts. • Global Market Impact: Asian equities slumped on Friday, with the MSCI Asia-Pacific index on track for a 1.5% weekly decline. Significant losses were recorded in Japan (Nikkei down 1.3%) and tech-heavy South Korea (down 2%). • Energy & Inflation: Brent crude remains volatile near the US$ 100 per barrel threshold (currently US$ 99.85) as threats to the Strait of Hormuz persist. Rising oil prices have spiked inflation fears, leading traders to scale back Federal Reserve rate cut bets from 50 bps down to just 20 bps for the year. • Currency & Safe Havens: The U.S. Dollar has emerged as the primary safe haven, gaining 2% since the conflict began in late February. The Japanese Yen hovers near 160 per dollar, while Gold is set for a 1% weekly drop as investors pivot toward the dollar and higher-yielding Treasury notes. • Sri Lankan Context: For Sri Lanka, sustained oil prices near US$ 100 pose a significant risk to the trade balance and domestic fuel pricing. Additionally, a stronger dollar and "higher-for-longer" global interest rates may pressure the LKR and complicate international debt dynamics.