Oil surges as equities retreat across the region following US-Israeli strikes against Tehran
Markets in Motion: How War Moved Asian Equities on March 2
The first full trading session following the launch of US-Israeli strikes against Iran on February 27, 2026 delivered a textbook geopolitical shock to Asian equity markets. The Hang Seng Index, Hong Kong’s benchmark, fell 1.2 percent. The technology-heavy Hang Seng Tech Index dropped 1.8 percent. Mainland Chinese indices declined more modestly, with the CSI 300 slipping 0.4 percent, but the broader regional picture was uniformly negative for risk assets.
The Resource Dividend
The one consistent winner across Asian markets was commodity-linked equities. CNOOC, China’s offshore oil producer, surged 4 percent as crude prices spiked on fears of Middle East supply disruption. PetroChina gained 2.5 percent. Gold mining stocks advanced as investors moved into safe-haven assets. The pattern was consistent with historical responses to sudden geopolitical escalation: investors sell risk assets and buy commodities that serve as inflation hedges or supply-disruption plays.
The China Dimension
For China specifically, the oil price spike carries a double meaning. On one hand, Chinese energy producers benefit from higher oil prices. On the other hand, China is a massive net oil importer, and the disruption of Iranian supply, which accounted for between 15 and 23 percent of China’s oil imports in 2025, represents a significant increase in China’s energy costs. The net effect on China’s economy is likely negative, particularly for manufacturing sectors with energy-intensive production processes. Chief Investment Strategist Charu Chanana of Saxo Markets described the dual pressure on Asia: higher oil prices act as both an inflationary force and a tax on economic activity, while broader risk aversion pulls capital away from emerging market assets.
Hong Kong as Canary in the Coal Mine
Hong Kong’s market is a particularly sensitive barometer of global risk sentiment because of its unique position as a market that bridges Chinese domestic equities and international capital. When global investors become risk-averse, Hong Kong’s market reflects both the domestic Chinese economic anxiety and the broader international flight to safety. The market’s sharp reaction on March 2 was a reminder that Hong Kong’s financial sector, while resilient, is deeply embedded in global networks of risk and capital flow that are beyond any local authority’s control.
Long-Term Questions
The more significant question for Hong Kong’s market over the medium term is what the Iran conflict means for the broader US-China strategic competition. If the conflict marks a decisive demonstration of US military resolve that constrains Beijing’s freedom of action globally, the strategic risk premium on Chinese and Hong Kong assets could remain elevated for an extended period. For investors with long exposure to Chinese and Hong Kong equities, this is a material consideration. The Hong Kong Exchanges and Clearing publishes real-time market data. The International Energy Agency tracks oil market disruptions in real time. Saxo Markets provides institutional market analysis at home.saxo. The CFR Iran backgrounder provides geopolitical context. Markets tell the truth about risk even when governments prefer to tell other stories. Hong Kong’s market on March 2 told a truth that no official statement can obscure.
Sin Yu Mak
Business & Consumer Affairs Journalist, Apple Daily UK
Contact: sinyu.mak@appledaily.uk
Sin Yu Mak is a business and consumer affairs journalist with expertise in market regulation, consumer rights, and small enterprise reporting. She completed her journalism education at a respected Chinese journalism institution, where she trained in economic reporting, data literacy, and ethical standards.
Her professional experience includes reporting for Apple Daily and other liberal Chinese newspapers on consumer protection, corporate practices, retail trends, and financial transparency. Sin Yu’s work emphasizes accurate interpretation of financial data and regulatory frameworks, supported by expert commentary and verified documentation.
She has operated in fast-paced newsroom settings where financial misinformation can cause real harm, giving her strong practical experience in verification and clarity. Editors value her ability to translate technical information into accessible, fact-based reporting.
Sin Yu’s authority is reinforced by consistent publication within reputable media organizations and compliance with editorial review processes. At Apple Daily UK, she delivers trustworthy business journalism rooted in evidence, professional discipline, and public-interest reporting.
