Global markets remain volatile on escalating Mideast conflict

Thursday, 5 March 2026 04:32 - - {{hitsCtrl.values.hits}}

Global financial markets remained volatile on Wednesday as investors reacted to the escalating conflict in the Middle East, with sharp equity losses in Asia, rising bond yields and higher energy prices fuelling concerns about inflation and delayed interest rate cuts.

European equities stabilised after two days of heavy selling. The pan-European STOXX 600 index rose 1.6% in early trading after falling 4.6% across Monday and Tuesday, marking its steepest two-day decline since April 2025.

Brent crude traded at $ 81.18 per barrel, slightly lower on the day but nearly $ 10 higher than last Friday’s close. European natural gas prices also edged lower after sharp gains earlier in the week.

South Korea’s KOSPI index plunged 12% on Wednesday, its largest single-day fall on record. The technology-heavy index has lost more than 18% over the past two trading sessions, while the Korean won weakened to its lowest level in 17 years.

Japan’s Nikkei 225 declined 3.6%, while Taiwan’s benchmark index fell 4.3% as investors exited semiconductor stocks, which had been among the strongest performing sectors in recent months.

The yield on the benchmark 10-year US Treasury note rose 2 basis points on Wednesday to 4.08%, bringing the weekly increase to 11 basis points. The two-year Treasury yield, which is more sensitive to monetary policy expectations, rose to 3.51%, up 13 basis points for the week.

The US dollar strengthened broadly, rising 1.3% against the Japanese yen and 0.5% against the Swiss franc this week. The euro recovered slightly to $ 1.1650 on Wednesday but remains down 1.15% for the week.

Gold fell more than 4% on Tuesday before rebounding 2% on Wednesday to around $ 5,193 per ounce.