LONDON, March 5, 2026, 11:54 (GMT)
- KOSPI in South Korea jumped close to 10% after the government moved to deploy a $68 billion stabilisation fund.
- Brent crude jumped above $84 a barrel for a short stretch, with conflict snarling shipping routes and stoking worries over rising inflation.
- Bond yields and the dollar edged higher as traders trimmed expectations for imminent rate cuts.
KOSPI surged close to 10% Thursday, lifted after President Lee Jae Myung moved to deploy a 100 trillion won ($68 billion) market stabilisation fund. The step helped Asian equities recover some ground, despite oil prices staying high amid the Iran conflict.
Energy’s back on top, and it’s moving markets. With oil and gas prices climbing, inflation expectations are getting pushed higher. Investors are now factoring in a smaller number of interest-rate cuts on both sides of the Atlantic.
This week’s sharp selloff has only added to nerves in markets that were already under pressure. Seoul’s KOSPI, meanwhile, has become something of a barometer for risk appetite, moving fast enough to keep investors on edge.
Iran fired a barrage of missiles at Israel in the early hours of Thursday, just after Republican senators in Washington stopped a bipartisan push to end the U.S. air campaign. Traders flagged chatter about possible de-escalation—though some questioned those reports.
European shares clawed back from earlier losses to trade a touch higher, though caution lingered. The euro eased off by 0.2% to $1.1610. The dollar index firmed 0.2% to 98.9 against key rivals. Government bonds still faced selling pressure.
Seoul bounced back, clawing back a good chunk of its previous record drop. Japan’s Nikkei tacked on close to 2%. Over in China, stocks advanced nearly 1% after Beijing rolled out a 2026 growth goal of 4.5% to 5% as part of its broader outlook.
Brent crude touched $84.25 a barrel, then slipped to near $83 in London—building on a roughly 15% rally since U.S. and Israeli strikes on Iran over the weekend. Ship-tracking data tallied around 300 oil tankers now inside the Strait of Hormuz, where vessel movement through the chokepoint has essentially come to a standstill.
The war’s ripple effects hit the gas market as well. Qatar invoked force majeure on its gas exports, according to Reuters sources, meaning some contracts are on hold under the legal escape clause. Getting production back to regular levels could take a month or more. “Nothing can replace Qatari LNG,” said Saul Kavonic, who heads energy research at MST Marquee. https://www.reuters.com/business/energy/qa…
Shifting expectations about rates were evident in the bond market. U.S. 10-year yields climbed nearly 4 basis points to 4.12%. In Germany, bunds headed for their sharpest weekly loss in a year. “The oil prices haven’t come down,” said Trevor Greetham at Royal London Asset Management. He also noted he was “not reading too much into the recovery” in stocks. https://www.reuters.com/world/china/global…
Travel and fuel-linked firms came under pressure. Wizz Air flagged a 50 million euro annual profit hit after axing flights serving Israel and a string of Middle East routes. “The geopolitical backdrop remains as combustible as ever,” said SPI Asset Management market strategist Stephen Innes. https://www.theguardian.com/business/2026/…
Still, the rebound isn’t on solid ground. Prolonged conflict risks pushing up energy prices, which can make inflation harder to tame, send borrowing costs even higher, and sap growth — a rough backdrop for stocks, particularly in economies that import most of their oil.
Investors are eyeing comments from European Central Bank officials set to speak later Thursday for any change in tone. Commerzbank strategist Erik Liem pointed out that the latest market moves might influence the ECB’s March projections, since the cutoff typically falls roughly two weeks ahead of the meeting.
