Global financial markets experienced significant declines as an ongoing war involving Iran continued to destabilize investor confidence across Asia and beyond. Asian stock markets extended a broader global selloff, with bonds also under pressure as geopolitical tensions persist.

Foreign investors withdrew a record $12 billion from Indian stock markets, with the outflows directly attributed to the Iran war's impact on regional investment sentiment. The massive capital flight represents one of the largest single-period withdrawals by international investors from Indian equities.

Despite the current turmoil, China reported robust industrial profit growth of 15% in early 2026, before the Iran conflict began affecting global markets. However, analysts warn that oil price shocks resulting from the war threaten the outlook for Chinese industrial performance going forward.

The conflict has created what some financial analysts are calling a "peace trade" scenario, where markets are positioning for various outcomes of the geopolitical crisis. Energy markets have been particularly volatile as investors assess potential supply disruptions from the Middle East region.

Meanwhile, Iran has seen hardline leaders consolidate control amid the ongoing hostilities, according to reports. The political developments come as the country faces international pressure and economic sanctions related to the conflict.

The combination of geopolitical uncertainty, capital flight from emerging markets, and concerns about energy supply chains has created challenging conditions for global investors as they navigate the evolving crisis.