Asian markets mixed to start week

Asia-Pacific markets presented a mixed performance on Monday as escalating tensions in the Middle East, marked by Israel and Hezbollah exchanging strikes, weighed on investor sentiment. This geopolitical uncertainty came as investors also digested dovish remarks from U.S. Federal Reserve Chairman Jerome Powell.

Reuters reported that over the weekend, Israel’s Air Force targeted Hezbollah positions in Lebanon, followed by over 320 rocket launches from the Iran-backed group into Israel. The attacks were in retaliation for Israel’s assassination of senior Hezbollah commander Fuad Shukr last month. However, both sides signaled a desire to avoid further escalation, with Hezbollah indicating no immediate plans for additional strikes and Israel’s Foreign Minister stating that the country seeks to avoid full-scale war.

Oil prices reacted to the conflict, with Brent crude rising 0.62% to $79.52 and U.S. West Texas Intermediate up 0.63% to $75.34.

In Asia, Japan’s Nikkei 225 fell 1.09%, while South Korea’s Kospi dropped 0.24%. Meanwhile, Hong Kong’s Hang Seng Index rose 0.99%, though the Chinese CSI 300 edged down 0.15%.