Asian stocks drop, oil rises

MSCI’s broadest index of Asia-Pacific shares outside ​Japan dropped more than 1%, set for a 9.5% decline this month, its biggest monthly drop since October 2022

Asian stocks dropped in choppy trading while oil rose on Thursday as investors treaded cautiously amid the dizzying pace of developments in the Middle East, with Iran reportedly saying it would ​weigh a U.S. proposal to end the war.

The widening war has jolted global markets this month, sending oil prices soaring, reigniting ‌inflation fears and upending global interest rate expectations.

Contradictory messages from the two sides over ceasefire talks have kept investors on edge.

U.S. President Donald Trump said Iran wants to make a deal while Iranian Foreign Minister Abbas Araqchi said there had been no dialogue or negotiations with the U.S.

Nikkei reversed ​early gains to trade 0.7% lower while South Korean stocks dropped 2.7% and Hang Seng index slipped 1.7%.

MSCI’s broadest index of Asia-Pacific shares outside ​Japan dropped more than 1%, set for a 9.5% decline this month, its biggest monthly drop since October 2022.

It looks like the market’s relief trade ​is starting to wobble, said Charu Chanana, chief investment strategist at Saxo. Traders are also remembering that one peace rumour does not undo the inflation ​and rates damage already in the system.

The nearly month-long war triggered by joint U.S.–Israeli attacks on Iran in late February has resulted in Iran effectively shutting the Strait of Hormuz, a conduit for a fifth of global oil and liquefied natural gas flows.

The disruption has sent crude prices surging above $100 per barrel. Brent crude futures were at $104.53, up over 2% ​on the day, and set for a 43.6% jump in the month.

The dollar held firm near recent highs and was on track for a ​2% monthly gain.