Middle Eastern Tensions Cause Global Stock Market Turbulence

On Friday, concerns about a potential escalation of the conflict between Iran and Israel caused markets to fall. The Nikkei 225 index in Japan dropped over 2.5 percent, while European stock markets initially struggled but eventually recovered as the day progressed.

Investors were on edge once again due to developments in the Middle East, with reports of Israel attacking Iran in response to a prior major attack. Despite no initial reports of damage, fears of conflict and uncertainty surrounding U.S. interest rate policy continued to affect the stock market.

Throughout the afternoon, European stock exchanges showed signs of stability as both Iran and Israel appeared to be trying to de-escalate tensions. However, concerns about inflation and interest rate policies persisted, remaining a focal point for markets in Europe and overseas.

While technology companies and chip manufacturers faced losses in Europe, major European stock indexes showed improvement overall. In Japan, the Nikkei 225 index experienced significant decline due to fears of an escalating conflict in the Middle East, impacting stocks of Japanese suppliers to the semiconductor industry. However, stocks of logistics companies rose as investors anticipated higher freight rates in case of war.

Korean and other Asian stock exchanges also saw losses on Friday, with Japan’s record-breaking streak temporarily halted despite recent downturns. Analysts at Nomura believe that markets may respond positively to economic strength and robust corporate profits starting from May onwards.