Asia Markets Plummet as Oil Prices Soar and Rate Hikes Loom

Share markets in Asia plummeted on Monday as oil prices skyrocketed due to supply concerns in the Middle East, while investors braced for potential interest rate hikes from the US Federal Reserve and Bank of Japan.

The Brent crude price surged almost 3% to $107.36 a barrel, with analysts warning that elevated oil prices could persist due to ongoing tensions in the region. The Strait of Hormuz, a key shipping route, remains under threat following an attack on Saudi Arabia and ships in the Gulf.

Investors are also preparing for rate hikes from both the Fed and BOJ this week, with the former seen as likely to increase rates by 25 basis points on Wednesday. The BOJ is expected to sound hawkish on further tightening to combat inflation.

Despite strong corporate earnings, equity valuations may be tested by higher borrowing costs, according to Goldman Sachs' chief US equity strategist Ben Snider.