PUBLISHED April 28, 2026
Global Markets Turn Sharply Lower
According to “Market Review for March 2026” published by Sumitomo Mitsui Trust Asset Management, global financial markets fell sharply during March as escalating conflict surrounding the closure of the Strait of Hormuz increased fears of a prolonged global slowdown. Rising geopolitical stress became the dominant driver of investor sentiment during the month.
Oil Prices Surge Above $100
One of the most immediate market reactions was in energy. The report states that oil prices climbed above USD 100 per barrel, increasing concerns about inflation, transport costs, and pressure on energy-importing economies such as Japan. Higher crude prices also added uncertainty for global growth expectations.
Japanese Equities Hit Hard
Japan was particularly affected by the March selloff. The Nikkei 225 fell 13.2%, while the TOPIX declined 11.2% during the month. This made Japan one of the more severely impacted major markets as investors reduced exposure to cyclical and export-oriented sectors.
Although losses were broad across sectors, some industries proved more resilient. The report notes that energy-related businesses such as mining and shipping outperformed, benefiting from higher commodity prices and stronger freight expectations linked to supply disruption concerns.
Although losses were broad across sectors, some industries proved more resilient. The report notes that energy-related businesses such as mining and shipping outperformed, benefiting from higher commodity prices and stronger freight expectations linked to supply disruption concerns.
The market decline was not evenly distributed. Smaller domestically focused Japanese companies performed better than large exporters, which were more exposed to global trade risks, currency volatility, and weaker external demand. This suggests investors temporarily favored businesses tied more closely to local demand.
After three consecutive months of significant net buying of Japanese equities, foreign investors became net sellers in March. The shift reflects how quickly international capital flows can reverse during periods of volatility and geopolitical uncertainty.
The March review shows how vulnerable markets remain to external shocks. For Japan, future performance will likely depend on whether energy prices stabilize, shipping routes remain open, and investor confidence returns. If tensions ease, Japanese equities could recover quickly. If not, volatility may continue into the next quarter.
The market decline was not evenly distributed. Smaller domestically focused Japanese companies performed better than large exporters, which were more exposed to global trade risks, currency volatility, and weaker external demand. This suggests investors temporarily favored businesses tied more closely to local demand.
After three consecutive months of significant net buying of Japanese equities, foreign investors became net sellers in March. The shift reflects how quickly international capital flows can reverse during periods of volatility and geopolitical uncertainty.
The March review shows how vulnerable markets remain to external shocks. For Japan, future performance will likely depend on whether energy prices stabilize, shipping routes remain open, and investor confidence returns. If tensions ease, Japanese equities could recover quickly. If not, volatility may continue into the next quarter.
