Nikkei, KOSPI and Hang Seng rise as Iran conflict signals shift
Japan’s Nikkei 225 index led the advance, climbing about 2.90% to close near 53,766 — recovering from correction territory reached earlier in the month when crude prices topped $100 a barrel. Hong Kong’s Hang Seng Index gained 2.79%, settling at 25,063.71, while South Korea’s KOSPI rose 1.59% to around 5,642.
These movements mark a clear reversal compared to a period of strong selling which saw certain indices fall by 5 to 12% during individual sessions. The catalyst was a combination of statements by Israeli and American officials indicating some restraint on Iran’s energy infrastructure.
Israel has revealed it will not target other Iranian energy assets, following public pressure from US President Donald Trump. Trump also announced what he called “productive talks” with Iran and disclosed a 15-point peace proposal, while postponing planned strikes against Iranian power plants.
Iran, in response, signaled a limited reopening of the Strait of Hormuz to non-hostile vessels. The Strait of Hormuz carries approximately 20% of global shipments of oil and liquefied natural gas. When Iran moved to restrict access to its territory following US and Israeli airstrikes, oil prices soared well above $100 a barrel, triggering massive sell-offs in import-dependent economies.
Asian markets were hardest hit. Japan imports about 90% of its oil from the Middle East, and South Korea has a similarly high degree of energy dependence. As those concerns subsided and oil prices fell sharply, investors shifted to the hardest-hit stocks. In Japan, buying was widespread, with energy-sensitive and export-oriented stocks leading the way.
In Hong Kong, investors turned to undervalued technology and financial stocks, betting that stabilized trade flows would support profits. In South Korea, Samsung Electronics and SK Hynix contributed to the KOSPI rally, as lower input cost forecasts and a resumption of foreign capital inflows offset earlier outflows linked to oil-related stagflation fears.
U.S. stocks and European markets reflected similar relief, although analysts noted the conflict remained unresolved. At the open on Wall Street, the Nasdaq Composite climbed 264.88 points to 22,026.78, while the Dow Jones Industrial Average added 337.60 points to 46,461.66. The S&P 500 gained 51.49 points to 6,607.86 and the NYSE Composite rose 129.86 points to 22,101.16 just before 11 a.m. Eastern on Wednesday.
The broad-based advance reflects the same geopolitical relief driving Asian markets as investors price in reduced energy supply risk as U.S.-Iran negotiations progress and tensions in the Strait of Hormuz ease. Any breakdown in negotiations between the United States and Iran could reverse the decline in oil prices and send markets tumbling again.
Trading in early March demonstrated how quickly sentiment changes – sessions with double-digit percentage swings in either direction were not uncommon. Investors tracking the recovery are also looking to see whether falling energy costs will translate into tangible relief in inflation data heading into the second quarter, and what flexibility that might provide for central banks, including the Federal Reserve and the Bank of Japan.
Recent stock trading sessions illustrate how Asian stock performance is closely tied to supply stability in the Middle East, a structural condition that has not changed even as the immediate threat has eased.
FAQs 🔎
- Why did Asian markets rebound on March 25, 2026? Investors reacted to signals of de-escalation in the conflict between the United States, Israel and Iran, including Israeli commitments not to attack Iranian energy infrastructure and Trump’s announcement of peace talks, which eased fears of prolonged oil supply disruptions.
- What is the “energy relief” profession? This involves buying into markets dependent on oil imports – particularly Japan, South Korea and Hong Kong – when threats to Middle East supplies ease and energy prices decline.
- How has the Strait of Hormuz affected oil prices in early 2026? Iran’s decision to restrict the strait following U.S. and Israeli airstrikes pushed crude prices above $100 a barrel, fueling inflation fears and heavy stock selling across Asia.
- Which Asian indices gained the most on March 25, 2026? Japan’s Nikkei 225 led with a gain of around 2.90%, followed by Hong Kong’s Hang Seng at 2.79% and South Korea’s KOSPI at 1.59%.
