📈 Global Energy Shock: Asia Stocks Dive as Brent Crude Eyes Record 60% Monthly Rise

A protracted Gulf conflict and the closure of the Strait of Hormuz have triggered a massive sell-off across Asian markets, signaling heightened inflationary risks and potential recessionary pressure for energy-dependent economies like Sri Lanka. • Market Performance: - Japan’s Nikkei slumped 4.7% (down ~14% in March). - South Korea fell 4.2%, while MSCI Asia-Pacific dropped 1.2%. - U.S. and European futures are trading in the red, down between 0.7% and 1.5%. • Energy & Commodities: - Brent Crude surged 3.0% to US$ 115.98/bbl, marking a staggering 60% monthly increase—surpassing the 1990 Gulf War price spike. - Analysts warn prices could hit US$ 150/bbl if supply disruptions continue into June. - Surging costs are reported for fertiliser, shipping fuel, plastics, and pharmaceuticals, directly impacting Sri Lanka’s tea production costs and apparel logistics. • Macro Outlook: - Markets have pivoted from expecting interest rate cuts to anticipating further tightening by the U.S. Federal Reserve. - The U.S. Dollar remains dominant as a "safe haven," with the Yen weakening past 160, putting further pressure on Asian currency stability and import costs. - Global inflation is spiking; EU annual inflation is forecast to leap to 2.7% from 1.9% in just one month.