By Ronnie Harui


Oil prices were volatile and Asian equities broadly retreated as renewed U.S.-Iran tensions stoked fears of supply disruptions and prompted investors to pull back from stock markets.

The U.S. military conducted strikes against Iran on Tuesday in retaliation for the downing of a U.S. Apache helicopter near the Strait of Hormuz, according to U.S. Central Command. President Trump directed the strikes, which the military characterized as a self-defense measure. The mission is "a proportional response" to unjustified Iranian aggression, said Centcom, which oversees U.S. forces in the Middle East.

"The ceasefire architecture in the Middle East continues to deteriorate with U.S. forces striking Iranian air defense, ground control and radar sites near the Strait of Hormuz," InTouch Capital Markets analysts wrote. "Washington framed the strikes as a proportional, self-defense response, but Iran's foreign minister vowed no attack or threat would go unanswered," the team said in a commentary.

U.S. officials said the helicopter was likely struck by an Iranian Shahed drone while on patrol off the coast of Oman. While Iranian officials said Tehran didn't deliberately target the helicopter, U.S. officials said the attack merited a response, whether it was intentional or not. The Hormuz Strait is a critical waterway for about one-fifth of the world's oil trade.

Crude oil futures swung between gains and losses in the Asian session on Wednesday. Front-month West Texas Intermediate crude oil futures were recently 0.1% lower at $88.15 a barrel after rising as high as $90.00 a barrel earlier, ICE data showed. Front-month Brent crude oil futures edged down 0.1% to $91.36 a barrel after earlier climbing as high as $93.26 a barrel.

South Korea's Kospi led losses across most Asian equity markets, falling 6.8%. Chip stocks logged some of the biggest declines, with bellwether Samsung Electronics down 8.2% and SK Hynix shedding 9.6%. Japan's Nikkei Stock Average declined 2.2% and Hong Kong's Hang Seng Index lost 1.3%. India's Sensex rose 0.7% and the FTSE Bursa Malaysia KLCI added 0.3%, bucking the trend.

"Tech, which has shouldered the market rally so far, is giving signs of exhaustion," Swissquote's Ipek Ozkardeskaya said in an email. "Overall, market nerves look fragile and volatility is rising," the senior analyst said.


Write to Ronnie Harui at ronnie.harui@wsj.com


(END) Dow Jones Newswires

06-10-26 0210ET