American Marconi Wireless News - Seoul tanks as Asian stocks tumble, oil extends gains on Iran war

As the joint strikes on the Islamic republic moved into a fifth day, observers warned that the continued choking of crude supplies from the Middle East would continue to push prices higher and deal a blow to hopes for any more monetary easing.

US President Donald Trump pledged that if needed, the navy would escort oil tankers through the Strait of Hormuz -- through which about a fifth of global oil supplies flow -- and ordered Washington to provide insurance for shipping.

That provided some relief to traders and pared a rally in prices Tuesday.

However, Iranian strikes on several neighbours threatened to broaden the conflict, while uncertainty about how long the war would go on and news that some oil fields in the region had been closed continued to put upward pressure on the commodity.

Both main oil contracts rose around one percent Wednesday.

West Texas Intermediate has soared 12 percent to more than $75 since last Friday, before the attacks began, while Brent is up more than 13 percent to sit above $82.

With some warning that they could top $100 a barrel, equity markets are taking a pounding.

"Asian equities are now staring at a third consecutive day of losses and the reason is not mysterious," wrote Stephen Innes at SPI Asset Management.

"When crude edges higher, the invoice lands hardest in Asia, where imported energy is not just a line item but a structural dependency.

"Export-driven economies suddenly find themselves recalculating margins with a more expensive barrel sitting quietly in the background of every factory floor and shipping lane."

Seoul was at the forefront of the selling, having rattled to multiple record highs since the start of the year on the back of the AI tech boom.

Trading on the Kospi and Kosdaq was halted after they both sank more than eight percent, and when business resumed they extended losses.

The Kospi crashed more than 12 percent -- after shedding more than seven percent Tuesday -- as panic-selling set in and traders unwound their positions

That left the index suffering its worst two-day collapse since 2008 during the global financial crisis.

Chip giants Samsung and SK hynix, which have heen at the forefront of Seoul's surge this year, dived around 10 percent.

Japan's Nikkei 225 was off more than four percent, with chipmakers Advantest and Tokyo Electron losing more than four percent.

Elsewhere in Asia, Hong Kong, Sydney, Singapore and Taipei all dived more than two percent, while Bangkok tumbled eight percent to also spark a trading halt. Shanghai, Wellington, Manila and Jakarta were also deep in negative territory.

The selling followed big losses in Europe, where London fell 2.8 percent but both Frankfurt and Paris dropped by more than three percent -- hit by a spike in natural gas prices to their highest levels since Russia's invasion of Ukraine.

The prospect of energy costs spiking has hammered hopes for any more central bank interest rate cuts as officials were already concerned about still-elevated inflation.

Analysts said the Federal Reserve, European Central Bank and Asian central banks would likely delay interest rate cuts but the Bank of England as well those in parts of Latin America and Central Europe could be forced to hike.

- Key figures at around 0400 GMT -

Seoul - Kospi: DOWN 12.6 percent at 5,065.14

Tokyo - Nikkei 225: DOWN 4.3 percent at 53,834.75

Hong Kong - Hang Seng Index: DOWN 2.8 percent at 25,051.33 (break)

Shanghai - Composite: DOWN 1.4 percent at 4,063.57 (break)

West Texas Intermediate: UP 0.8 percent at $75.12 per barrel

Brent North Sea Crude: UP 1.0 percent at $82.22 per barrel

Euro/dollar: DOWN at $1.1603 from $1.1617 on Tuesday

Pound/dollar: DOWN at $1.3329 from $1.3358

Dollar/yen: DOWN at 157.53 yen from 157.59 yen

Euro/pound: UP at 87.06 pence from 86.98 pence

New York - Dow: DOWN 0.8 percent at 48,501.27 (close)

London - FTSE 100: DOWN 2.8 percent at 10,484.13 (close)

C.Garcia--AMWN