Despite the diplomatic overtures, oil prices have continued their ascent climbing 14.5% so far this week, while European natural gas prices have surged a staggering 60% over the last two days following the shutdown of Qatari LNG facilities and the closure of the Strait.The economic impact of these spikes is being felt acutely across energy-dependent regions.
While the DAX shed 6% over the last two sessions, the South Korean Kospi plummeted 12% overnight, reflecting a growing global anxiety over potential stagflation. This is the KOSPI benchmarks largest drop on record as South Korea is heavily reliant on Middle Eastern oil.
Over two days the tech-heavy index has lost more than 18% of its value while the currency KRW has slumped to a 17-year low.
The trajectory of the market now hinges on the duration of the conflict and whether energy prices ease. A prolonged standoff increases the risk of a sustained energy shock, which could cement the stagflationary pressures currently being priced in by traders.
According to sources, Qatar would need 2 weeks to restart gas liquefaction after a full shutdown. Once restarted, Qatar would need at least another 2 weeks to reach full capacity, which could lead to a temporary shock in prices if the conflict was to reach a swift conclusion.
Performance within the DAX remains a mixed bag of sector-specific reactions and corporate earnings.
Technology stocks are providing some upward momentum, with Infineon Technologies rising 3.7%, while defense stocks are seeing a modest recovery.
However, individual earnings reports are weighing on the index; Adidas shares dropped 7% on disappointing results (now down 5%), and Bayer fell 4.76% after providing a weak 2026 profit outlook that overshadowed a fourth-quarter earnings beat.
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