📈 Global Market Volatility Amid Middle East Tensions

Global financial markets faced significant turbulence on Wednesday as escalating Middle East conflict triggered sharp equity losses and spiked energy prices, impacting inflation outlooks. • Energy & Commodities: Brent crude settled at US$ 81.18 per barrel, up nearly US$ 10 from last Friday. Gold rebounded 2% to US$ 5,193 per ounce following a sharp 4% dip. • Equity Market Plunge: Asia saw massive sell-offs with South Korea’s KOSPI suffering a record 12% single-day drop. Japan’s Nikkei 225 fell 3.6%, while Taiwan’s benchmark dropped 4.3% as investors exited the semiconductor sector. • Currencies & Yields: The US Dollar strengthened, rising 1.3% against the Yen this week. The 10-year US Treasury yield rose to 4.08%, reflecting concerns over delayed interest rate cuts. • European Recovery: After a steep two-day decline (the worst since April 2025), the STOXX 600 showed signs of stabilization, rising 1.6% in early trading. Context: For Sri Lanka, sustained high energy prices and global inflation volatility could pressure import costs and debt servicing, despite the recovery in European markets—a key destination for apparel & textiles.