The Morning Edge

Geopolitics, Rate Worries Push Asia Stocks Sharply Lower

Here’s your quick read to start the day: a chatty, no-fuss look at overnight moves, the big story, what’s on the docket, and the tickers you need to watch.

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Bank of Japan, Tokyo

By Richard Fargose

Richard is an independent financial journalist who tracks financial markets and macroeconomic developments

March 30, 2026 at 2:08 AM IST

GLOBAL MOOD: Extreme Risk-Off
Drivers: Iran warns of ground assault response, Islamabad talks last hope,

Asia-Pacific markets signalled a clear risk-off mood on Monday as the Middle East war entered its fifth week and widened after fresh missile attacks. Sharp falls in the Kospi, Nikkei 225 and Topix reflected rising geopolitical anxiety and oil-driven inflation risks.

The Bank of Japan signalling possible faster rate hikes added to pressure, while weak futures for the Hang Seng Index underscored fragile sentiment. Investors now await Jerome Powell’s speech and key macro data for direction.

TODAY’S WATCHLIST
- US Fed Powell’s Speech
- India IIP Data

THE BIG STORY
Iran accused the US of secretly planning a ground assault while simultaneously pursuing negotiations, with parliament speaker Mohammad Baqer Qalibaf warning that Tehran was "ready to respond" if US troops deployed. "As long as the Americans seek Iran's surrender, our response is that we will never accept humiliation," Qalibaf said in a message to the nation that the clearest signal yet that Iran views the current diplomatic window as a cover for military build-up rather than a genuine peace overture. The accusations came as foreign ministers from Pakistan, Saudi Arabia, Turkey, and Egypt gathered in Islamabad to discuss ways to halt the month-long conflict, which has killed thousands and caused the largest disruption to global energy supplies in history. The Islamabad meeting represents the most substantive multilateral diplomatic effort since the war began, but Iran's ground assault accusations suggest Tehran's trust in the process is severely limited.

On the broader geopolitical front, Ukraine's President Zelenskiy travelled to the UAE and Qatar, signing 10-year defence cooperation agreements with both countries covering missile and drone countermeasure expertise, adding a new dimension to Ukraine's Gulf diplomacy as the West Asia conflict reshapes regional security alliances. Zelenskiy confirmed a similar agreement with Saudi Arabia has already been signed, with the UAE deal expected within days.

Meanwhile, trade ministers at a WTO meeting in Cameroon are edging toward a reform agreement, with the key sticking point being the extension of the e-commerce moratorium on customs duties for digital downloads, a test of the institution's relevance after a year of tariff turmoil and West Asia-driven trade disruption. The US and India remain the primary holdouts, with the moratorium due to expire this month.

Data Spotlight
US consumer sentiment collapsed to 53.3 in March, well below the preliminary estimate of 55.5 and February's 56.6, placing confidence near the record lows seen at the end of 2025. Declines were broad-based across all age groups and political affiliations, with middle and higher-income households and those with stock market wealth experiencing the steepest drops. Rising gas prices and financial market volatility, both driven by the West Asia conflict, were the primary culprits. The short-term economic outlook plunged 14% while expectations for personal finances over the next year fell 10%, though long-term expectations saw only modest declines suggesting consumers view the current shock as severe but potentially temporary. Year-ahead inflation expectations jumped to 3.8%, the largest monthly increase since April 2025, while long-run expectations edged down to 3.2%.

Takeaway:
US consumer sentiment is a serious warning signal — at current levels, household spending intentions typically contract meaningfully, adding a demand-side headwind to the supply-side energy shock already hitting the economy. The 3.8% year-ahead inflation expectation is particularly concerning for the Fed, as entrenched consumer inflation psychology can become self-fulfilling through wage demands and spending behaviour.

WHAT HAPPENED OVERNIGHT

US stocks logs fifth straight weekly loss as inflation fears, Iran war grip markets
- The S&P 500 fell 1.4%, Nasdaq slid 1.9%, and the Dow tumbled 1.4% the Dow now down over 10% from its recent high, joining Nasdaq in correction territory.
- Nvidia dropped 2.2%, Microsoft fell 2.5%, Alphabet shed 2.5%, and Meta lost 4% as tech heavyweights bore the brunt of the risk-off rotation.
- JPMorgan fell 3% and Visa lost 3.3% as financial and credit-sensitive stocks struggled under rising yield pressure.
- Exxon Mobil bucked the trend, gaining 3.5% as WTI topped $99/barrel, energy remaining the conflict's only consistent equity winner.
- Trump's extension of the strike deadline to April 6th failed to provide meaningful relief, with the Strait of Hormuz closure continuing to fuel stagflation fears.
US Treasury yield touches 4.48%, highest since July 2025, before settling at 4.42%
- The 10-year yield spiked to 4.48%, its highest since July 2025 before pulling back to settle at 4.42% as traders balanced inflation fears against growth concerns.
- Oil trading near 2022 highs kept the inflation risk premium firmly embedded in Treasury pricing despite Trump's 10-day strike pause.
- Markets are bracing for the conflict to extend well into April, with the pause widely viewed as a force build-up window rather than a genuine diplomatic breakthrough.
- The intraday high of 4.48% reflects a bond market pricing a world where the Fed is effectively frozen and unable to cut as inflation surges, unwilling to hike as growth deteriorates.
- The 10-year has now risen nearly 50 basis points from its sub-4% lows hit just four weeks ago. It’s one of the sharpest short-term yield surges since the 2022 rate hiking cycle.

US Dollar holds near 100 for weekly gain as Iran war, inflation concerns provide firm floor
- The US dollar index held steady near 100, on track for a weekly gain of around 0.3% as persistent West Asia conflict concerns underpinned safe-haven demand.
- Oil trading close to 2022 highs kept inflation concerns front and centre, directly supporting the dollar's higher-for-longer appeal.
- Markets are bracing for the conflict to extend well into April despite Trump's 10-day pause on Iranian energy infrastructure strikes through April 6th.
- Some investors fear the pause is being used to build up additional US forces in the region rather than pursue genuine diplomacy — a concern that is keeping safe-haven dollar demand intact.
- Iran's rejection of the US peace proposal as "one-sided" and continued attacks across West Asia reinforce the view that the 10-day window will not produce a breakthrough.

Crude oil hits $112 as ceasefire scepticism drives weekly gains
- Brent crude rose 4.2% to $112.57/barrel and WTI surged 5.5% to $99.64/barrel as markets priced deepening scepticism over ceasefire prospects.
- On a weekly basis, Brent gained 0.3% and WTI gained over 1%, modest but telling given the 10-day strike pause announced mid-week.
- Brent has now surged 53% since February 27, the day before US-Israeli strikes began, while WTI is up 45% over the same period.
- The 10-day pause on Iranian energy plant strikes failed to meaningfully cap prices, with markets treating it as a temporary measure rather than a genuine ceasefire signal.
- WTI approaching $100 for the second time this conflict underscores how structurally elevated the oil market has become.
- With the Strait of Hormuz still disrupted and Iran rejecting the US peace proposal as "one-sided," the supply risk premium shows no sign of sustainably unwinding.

Day’s Ledger*

Economic Data

India February Industrial Production Data
Germany March CPI Data

Corporate Actions

Manappuram Finance to consider fund raising
Nazara Technologies to consider fund raising

Policy

US Fed Chair Powell Speech

Tickers to Watch

BOMBAY BURMAH TRADING CORPORATION sold tea plantations in the Nilgiris for ₹1.20 billion.
COAL INDIA won an LoA to set up a 750 MWh BESS plant at Choutuppal with a project cost of ₹10.57 billion and formed a 50:50 power JV with Damodar Valley Corporation.
DEEPAK BUILDERS AND ENGINEERS INDIA emerged as L1 bidder for a residential infrastructure project at IOC’s Panipat refinery township worth ₹4.74 billion.
GR INFRAPROJECTS emerged as L1 bidder for an NHAI road project worth ₹14.54 billion in Gujarat and also secured an NTPC BESS contract worth ₹4.13 billion.
JNK INDIA received a major order worth ₹3–6 billion from JNK Global, Korea, for refinery project support services and supplies.
KNR CONSTRUCTIONS won an NHAI order for a four-lane NH-167 stretch in Telangana with a project cost of ₹17.34 billion.
RAILTEL CORPORATION OF INDIA received an LoI worth ₹4.44 billion from the Centre for E-Governance
THERMAX subsidiary secured a boiler package supply order worth ₹16 billion for a 1x800 MW ultra-supercritical thermal power plant.
TVS HOLDINGS invested ₹5.27 billion in Home Credit India Finance by acquiring additional equity shares, raising its stake to 80.39%.

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