Global Markets Plummet Amid Ongoing Iran Conflict

Markets around the world have begun to plummet as fighting in Iran continues. Traders grew nervous after a weekend with no clear signs of de-escalation in the Gulf.

Market moves on Monday

Major indices fell in early trading on Monday. Losses were largest in Asia and notable across Europe.

• Germany’s DAX fell just over 2% by midday.
• France’s CAC 40 was down roughly 2%.
• London’s FTSE 100 logged similar losses before a late-morning recovery.
• Japan’s Nikkei 225 closed down 3.5% at 51,515.49.
• South Korea’s Kospi plunged about 6.5% to 5,405.75.
• Hong Kong’s Hang Seng fell 3.5%; Shanghai Composite dropped 3.6%.
• Taiwan’s Taiex lost 2.5% and Australia’s A&P/ASX 200 slid 0.7%.

Safe havens, bonds and commodities

Traditional safe havens suffered sharp losses. Gold and silver tumbled nearly 7% and 8%, respectively.

Crude oil ticked higher, but only marginally. Ten-year government bond yields rose modestly across Western markets.

Recent trendlines and monthly declines

Markets have weakened since strikes earlier this year. The first attacks on Tehran began on February 28, the report said.

The DAX slipped below 22,000 points after trading above 25,000 before those strikes. That represents a decline of more than 12%.

• Germany’s DAX hit its lowest level since early April last year.
• France’s CAC 40 lost about 11% of its value in one month.
• The FTSE 100 fell roughly 6.67% over a month.
• The Dow Jones slid about 6.6% and the S&P 500 dropped nearly 5% in the same period.

Geopolitical triggers

The Strait of Hormuz remained blocked as tensions continued. There were no clear signs of regional de-escalation.

U.S. threats over the weekend demanded the Strait be reopened within 48 hours. Tehran warned it would retaliate by targeting U.S. and Israeli energy and infrastructure assets.

Energy-sector warning

Fatih Birol, executive director of the International Energy Agency, issued a stark warning. He said the economic fallout from the war with Iran could outmatch past shocks.

He described the situation as combining multiple energy crises and called it a major threat to the global economy.

Policy implications

Rising energy costs are complicating expectations for interest rate cuts. Higher fuel prices raise inflationary pressures.

Central banks may find it riskier to lower borrowing costs while energy-driven inflation persists.

Edited by Elizabeth Schumacher, Filmogaz.com