Global Markets Recoil as U.S.-Iran Tensions Escalate 📈

Global financial markets faced a sharp downturn following U.S. President Donald Trump’s vow to hit Iran "extremely hard," triggering fears of a prolonged conflict. The lack of clarity on the reopening of the Strait of Hormuz has intensified supply concerns across Asia. • Energy & Commodities: Brent crude surged 5% to US$ 106.16 per barrel. The continued closure of the Strait of Hormuz remains a critical risk for fuel shipping routes, directly impacting energy costs for import-dependent nations like Sri Lanka. • Global Equities: Risk assets saw a heavy sell-off. Asian markets were hit hardest; Japan’s Nikkei dropped 1.8%, while South Korea’s Kospi slid 3.6%. U.S. and European futures fell between 1% and 1.5%. • Currency & Macro Risks: The U.S. Dollar Index rose 0.3% to 99.858 as investors sought safety. Analysts warn of renewed stagflation risks—a combination of high inflation driven by energy prices and weakened economic growth. • Regional Impact: For Sri Lanka, the surge in oil prices and a strengthening Dollar may exert pressure on forex reserves and domestic fuel pricing, while volatility in Asian bourses could influence local investor sentiment in the banking and manufacturing sectors.