By Ronnie Harui
Asian equity markets largely retreated as escalating geopolitical and trade tensions damped investors' risk appetite.
The Gulf kingdom of Kuwait came under a barrage of ballistic missiles and drones on Wednesday that shut its international airport, killed one person, and injured dozens more, as Iran launched its biggest salvo of the near two-month ceasefire.
The latest skirmish marked one of the most intense bouts of fighting between the U.S. and Iran since the April ceasefire and happened as their negotiations to end the conflict have stalled.
"Risk-off sentiment returned after tensions in the Middle East, particularly between the U.S. and Iran, showed signs of flaring up again," Linh Tran, market analyst at XS.com, said in an email.
By Thursday afternoon, Japan's Nikkei Stock Average was down 1.5%, South Korea's Kospi declined 1.7%, and Singapore's FTSE Straits Times Index was 1.2% lower. Malaysia's KLCI rose 0.9%.
Adding to the negative market sentiment was the U.S. proposal for new tariffs of at least 10% on many of its trading partners over an alleged failure to address forced labor concerns.
"Not helping, tariffs were brought back onto the table," said Ipek Ozkardeskaya, senior analyst at Swissquote, in an email. "But no one knows whether they will remain in place, be ruled illegal, or be changed overnight."
Oil prices declined. The front-month West Texas Intermediate crude oil futures fell 0.8% to $95.22 a barrel, while front-month Brent crude oil futures were 0.9% lower at $96.91 a barrel, ICE data showed.
Write to Ronnie Harui at ronnie.harui@wsj.com
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06-04-26 0222ET
