Asia-Pacific markets saw mixed trading on Wednesday (June 18) as heightened geopolitical tensions between Iran and Israel, along with a looming U.S. interest rate decision, kept investors on edge.
Geopolitical Risks Weigh on Sentiment
Concerns deepened after former U.S. President Donald Trump reportedly considered a military strike on Iran, according to NBC News. Trump also posted on Truth Social, demanding “UNCONDITIONAL SURRENDER!” from Iranian Supreme Leader Ayatollah Ali Khamenei—a move that spurred fears of greater U.S. involvement in the escalating conflict.
“Comments from President Trump have triggered speculation that the U.S. will get more involved in the conflict between Iran and Israel that escalated significantly five days ago,” analysts at ANZ noted.
Asian Markets: Winners and Losers
Despite the geopolitical cloud, some major Asian indices posted gains:
- Japan’s Nikkei 225 rose 0.9% to close at 38,885.15
- Topix gained 0.77%, ending the day at 2,808.35
- South Korea’s Kospi advanced 0.74% to 2,972.19, while the Kosdaq climbed 0.53% to 779.73
Japan’s May exports dropped 1.7% year-over-year, beating expectations of a 3.8% decline. However, the data reflects growing concerns about the country’s trade-driven growth outlook, especially after the Bank of Japan warned of a slowdown in global and domestic corporate activity.
Other regional performances were more muted:
- Australia’s S&P/ASX 200 slipped 0.12%, finishing at 8,531.2
- Hong Kong’s Hang Seng Index dropped 1.12% to 23,710.69
- China’s CSI 300 edged up 0.12%, closing at 3,874.97
Wall Street Weak Ahead of Fed Decision
Overnight, U.S. markets closed in the red as traders turned cautious ahead of the Federal Reserve’s interest rate decision due later today:
- Dow Jones Industrial Average fell 299.29 points (0.70%) to 42,215.80
- S&P 500 slipped 0.84% to 5,982.72
- Nasdaq Composite dropped 0.91% to 19,521.09
U.S. stock futures also traded slightly lower in Asia, reflecting the global market’s wait-and-watch approach.
Looking Ahead
With global markets reacting to both rising geopolitical risks and central bank policy shifts, volatility is likely to remain elevated. Investors are now closely watching the Fed’s tone and projections, which could offer cues on whether rate cuts are still on the table for 2025.
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