The ongoing tensions between Israel and Iran took a heated turn on Saturday, triggering a domino effect that rippled through the stock markets around the world. The Asian stock market reacted violently to the latest geopolitical developments, dropping to new lows in a recent development.
On Friday, under the leadership of the Supreme Leader of Iran, Ali Khamenei, Iran launched a missile attack on Israel. The ongoing tensions escalated quickly, cackling through the financial space and influencing major stock indices and markets around the globe.
Equity indices in Japan, South Korea, and Australia toppled to new lows, along with Hong Kong futures noting stark value dips.
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Markets Are Brimming With Fear: What’s Happening?
The ongoing war between Iran and Israel is now sifting through the global stock market. The latest war developments have led the stock markets around the world to experience stark price volatility. The Asian stock market in particular has documented low trading activity, with investors anticipating the stocks to trade further down as the Iran-Israel war takes a violent turn.
The fear of the current war crisis taking an aggressive turn could potentially hurt the Asian stock market at large. The tensions could end up pushing the prices of oil up a notch, which could again trigger a spike in inflation metrics. The inflation rates coupled with stark economic meltdowns could topple the Asian stock markets to hit new lows, a rather logical scenario that is being reflected in the Asian stock market indices at press time.
The stock markets are showing signs of muted momentum, with leading stock indices projecting a “quiet” stance. Per Bloomberg, shares in Asia dropped to a six-week low, trading at their lowest points, spurred by rising geopolitical risks.
“Middle Eastern markets opened with relative calm following Iran’s attack, which was perceived as a measured retaliation rather than an attempt at escalation,” said Emre Akcakmak, a senior consultant at East Capital in Dubai. “However, the market impact might extend beyond the Middle East due to secondary effects on oil and energy prices, potentially influencing the global inflation outlook.” Bloomberg later shared
Impact Of The Latest War On The US Stock Market
The anticipation concerning the US stock market momentum is now worrying investors at large. The trader sentiment has recently hit a new low, with metrics reflecting a possible trading slowdown in the upcoming days.
Dow Jones futures rose slightly on Saturday, with S&P stabilizing as the US urged Israel to practice restraint amid the rising war tensions. However, the anticipation of the battle taking a serious turn is driving the current market momentum. The investors seem to be walking on eggshells, adopting a gradual market stance.
Apart from the stock market downturn, the cryptocurrency world also experienced aggressive major liquidations, with Bitcoin plummeting to $63K post-war announcement.
The trading activity in the US has adopted a rather restrained market stance. However, in the latest turn of events, the investors seem to be pivoting towards gold and the dollar to regain some of their lost fortunes.
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“Investors’ natural reaction is to look for safe-haven assets in moments like this. Reactions will be somewhat dependent on Israel’s response. If Israel does not escalate from here, it may provide an opportunity to buy risk assets at lower prices.” As shared by Patrick Armstrong, chief investment officer at Plurimi Wealth LLP to Bloomberg.
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