Asian stocks drop as oil surges

Equity markets opened sharply lower, with Nikkei and Kospi leading losses as crude prices vaulted above $100 a barrel for the first time in years

Asian stocks tumbled on Monday as a surge in oil prices driven by the escalating Middle East conflict rattled investors and stoked fears of renewed global inflation pressures.

Equity markets opened sharply lower, with Nikkei and Kospi leading losses as crude prices vaulted above $100 a barrel for the first time in years.

Nikkei 225 slumped more than 7% to a two-month low. It dropped more than 5% last week.

KOSPI declined more than 8% early trade, triggering circuit breakers and halting trading for 20 minutes. It last traded 7.9% lower.

Benchmark crude prices surged past $100 a barrel and briefly jumped as high as $111, marking one of the biggest oil spikes in recent years.

The spike in oil has heightened worries that global inflation could reaccelerate just as many central banks were preparing to ease monetary policy.

Elsewhere, investors digested latest economic data from China that provided a mixed signal on the outlook for the world’s second largest economy.

China’s consumer price index gained 1.3% in February from a year earlier, accelerating from January’s modest gain, while producer prices continued to decline, although the pace of deflation eased.

The inflation data suggested domestic demand may be gradually stabilizing, but the sharp increase in global energy prices risks adding renewed cost pressures for businesses and consumers.

Shanghai Composite and Shanghai Shenzhen CSI 300 indexes dropped 2% each, while Hong Kong’s Hang Seng slid 3.5%.

With oil prices soaring and geopolitical tensions intensifying, markets remained volatile.

S&P/ASX 200 declined 4% while Straits Times Index eased 3%.