Geopolitical tensions between Israel and Iran are shaking world markets, causing European and Asian stock market indices to fall sharply. Investors are turning to safe-haven assets such as gold and government bonds, while uncertainty persists over US monetary policy in the face of a possible rise in oil prices.
Financial markets reacted nervously to reports of an alleged Israeli attack on Iran.
At 10 a.m., the CAC 40 was down 0.65% at 7,970.9 points following these developments. By 1 p.m., the leading index had reached 7,998.48 points (-0.31%).
All other European stock indices were also down, from Germany’s DAX (-0.63%) to the UK’s FTSE (-0.46%), following a downward trend initiated during a tumultuous session in Asia.
Similarly, Japan’s Nikkei (-2.66%), which was among the fastest-growing stock indices in the first quarter, is now approaching a correction, down 10% on its recent peak.
Safe-haven assets in the face of crisis
US officials reported the attack, in response to the recent strikes against Israeli territory on the night of April 13-14. Today, explosions were reported near Isfahan, a region with nuclear facilities, but no major damage has been confirmed, according to the International Atomic Energy Agency.
Iranian officials said they had neutralized several drones and activated air defense systems, but did not attribute any attacks to Israel.
Faced with this escalation of tensions, investors are turning to safe-haven assets, whose value does not diminish in times of crisis. Government bonds are in demand, and yields are falling.
For example, the yield on the US ten-year bond fell by seven basis points to 4.58%. The yen, Swiss franc and gold, meanwhile, saw their values rise. The latter reached $2,417.59 an ounce on Friday morning for only the second time in its history.
Oil markets under observation
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