Amid rising geopolitical tensions in the Middle East, the market’s risk-taking behavior has decreased. However, reports from the media suggest that Israel conducted an attack on Iran on Friday morning, causing initial price fluctuations. The extent and impacts of these attacks are still uncertain, with Iranian authorities claiming that the effects were minor.
In response to the news, investors sought safe-haven investments, resulting in notable changes such as a decrease in stock prices and an increase in government bond prices. For example, Germany’s ten-year government bond rate fell by two percentage points to 2.47 percent, while the long-term interest rate in the United States briefly dropped by over ten basis points.
After half an hour of trading, the Stoxx 600 index decreased by 0.7 percent, with industrial stocks experiencing the most significant decline of over 1.5 percent. The market’s preference for safe-haven assets was evident in the rise of grocery company shares by 0.8 percent. L’Oreal’s better-than-expected results also supported grocery companies, with the company’s share price increasing by 4.8 percent.
Kathleen Brooks, director of research at XTB, noted that now that the attack appears limited, the market has found relief. However, if uncertainty persists across asset classes may rise.” European markets are heading into a third consecutive week of decline amidst ongoing geopolitical tensions in the Middle East.
As tensions continue to escalate in the Middle East region, investors have become increasingly cautious about taking risks in financial markets.
While reports suggest that Israel conducted an attack on Iran on Friday morning,
The extent and impact of these attacks are still uncertain.
Iranian authorities have claimed that they were minor.
In response to this news,
Investors sought safe-haven investments like government bonds.
