European stock markets recovered from their morning losses on Friday, easing concerns about a potential escalation of the conflict between Iran and Israel. Investors were once again on edge due to the latest 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 a conflict in the region and uncertainty surrounding U.S. interest rate policy continued to affect the stock market.
Throughout the afternoon, European stock exchanges showed signs of stabilization as both Iran and Israel appeared to be attempting 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, major European stock indexes showed improvement. The Swiss leading index SMI rebounded as well, but Japanese stocks experienced significant declines due to fears of an escalating conflict in the Middle East impacting suppliers to the semiconductor industry. Logistics companies saw higher freight rates as investors anticipated war, while Korean and other Asian stock exchanges also saw losses temporarily halted after Japan’s recent downturn.
Analysts at Nomura believe that markets may respond positively to economic strength and robust corporate profits starting in May, despite recent downturns caused by conflicts and uncertainty around interest rates.
