Morgan Stanley warns of 20% Asian share fall
Morgan Stanley is urging investors to back away from Asian stocks, warning that the Iran war and related energy shocks could hit the region's economies harder than others.
The bank says Asian shares could fall 15% to 20% in an adverse scenario, way steeper than the S&P 500's recent 3.7% slide.
Brent crude tops $112 a barrel
If you're watching global markets or thinking about investing, Asia's heavy reliance on imported oil and gas puts it in a tough spot.
Oil prices have risen sharply this year (2026), with Brent crude topping $112 a barrel; strategists warn prices could remain elevated in the near term and could spike further in an adverse scenario.
Plus, an attack on a major LNG site in Qatar may hurt LNG exports to Asia; the region is also vulnerable to disruptions in other inputs such as ammonia.
High energy costs could mean bigger trade deficits
High energy costs could mean bigger trade deficits, more inflation, and less spending power across Asia.
The US Federal Reserve has signaled it may keep rates on hold, which could limit monetary accommodation.
All this adds up to a rough outlook for Asian markets, so Morgan Stanley thinks caution is smart right now.