Asian Stocks Plummet as Oil Prices Soar Amid US-Iran Tensions

Stocks across Asia plummeted on Wednesday as investors became increasingly concerned about rising bond yields and oil prices. The tensions between the United States and Iran have led to a surge in crude prices, with oil jumping over two percent this week.

The Strait of Hormuz, which accounts for nearly one-fifth of global oil and gas shipments, has been effectively closed due to the military actions, causing energy costs to soar. This has fueled fears of inflation, as well as worries about government spending and a flood of corporate debt sales.

As a result, investors are ramping up their bets for rate hikes by the Federal Reserve. The yield on 30-year UK government bonds is at its highest since 1998, while those for 10-year debt are at levels last seen during the global financial crisis of 2007-08.

Rajeev De Mello from Gama Asset Management stated that bond yields were already rising before the renewed US-Iran attacks and their impact on oil prices. He noted that 'at these levels, higher yields are clearly a headwind to Asian equities, especially longer duration tech stocks.'