Asia markets set to fall as Middle East war escalates; investors eye China’s ‘Two Sessions'

Most Asia-Pacific markets were set to open lower on Wednesday, extending their sell-off amid an escalating Middle East war, with investors also look toward an annual parliamentary meeting by China's policymakers that kicks off later in the day.

The gathering, dubbed the "Two Sessions," consists of a consultative congress that will start later in the day, and a National People's Congress due to open Thursday. Chinese Premier Li Qiang is set to announce a series of economic targets at the NPC, which had largely been decided at a December meeting. 

Australia's S&P/ASX 200 started the day down 1.44%.

Japan's Nikkei 225 futures pointed to a weaker open for the market, with the futures contract in Chicago at 55,085 and its counterpart in Osaka at 55,320 compared to the index's last close of 56,279.05.

Hong Kong Hang Seng index futures were at 25,448, lower than the HSI's last close of 25,768.08.

Oil prices extended gains with U.S. crude futures up 0.87% to $75.21, while Brent was up 5.43% at $81.96 per barrel amid a widening conflict, with Iran attempting to close the Strait of Hormuz.

A senior commander from Iran's Revolutionary Guard said on Monday that the critical artery had been shut and warned that any vessel attempting to transit the waterway would be targeted, according to Iranian media.

U.S. President Donald Trump said Tuesday afternoon that the U.S. Navy will escort tankers through the Strait of Hormuz, if necessary.

"No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD," he said in a Truth Social post. "The United States' ECONOMIC and MILITARY MIGHT is the GREATEST ON EARTH — More actions to come."

Overnight in the U.S., socks had another wild session as concerns around a prolonged U.S.-Iran conflict rattled markets.

The Dow Jones Industrial Average lost 403.51 points, or 0.83%, and ended at 48,501.27. The S&P 500 slipped 0.94% to close at 6,816.63, while the Nasdaq Composite shed 1.02% to settle at 22,516.69. At their lows of the day, the S&P 500 lost 2.5%, and the Nasdaq was down about 2.7%. The 30-stock Dow was down more than 1,200 points, or around 2.6%, at its nadir.

—CNBC's Sean Conlon and Pia Singh contributed to this report.