LONDON, March 1 - Financial markets reopened with pronounced moves toward traditional safe havens following a weekend of intense military action between the United States, Israel and Iran that resulted in the death of Supreme Leader Ayatollah Ali Khamenei.
The Swiss franc and Japanese yen both gained ground as investors sought lower-risk assets. The euro weakened 0.34% to $1.1776 from around $1.18 in late New York trade on Friday, and declined 0.5% against the Swiss franc to 0.9039 - a level quoted in the article as its weakest since 2015. The U.S. dollar retreated 0.26% to 155.65 yen, even as the greenback strengthened versus sterling and the Australian dollar.
The strikes by U.S. and Israeli forces, and Iran's retaliatory actions, have reverberated through the Middle East and across several market sectors, touching shipping, air travel and oil. The Gulf region's role as a strategic maritime corridor and a global trade hub was cited as a factor amplifying concerns about energy costs and commercial disruption.
Market participants identified energy markets as a central channel through which the geopolitical shock could influence equities, bonds and currencies. Analysts and traders expect a pronounced move in oil prices as Asian markets open - traders reported oil already trading up around 10% in over-the-counter markets. Safe-haven gold was highlighted as likely to rise, while equity markets were expected to open lower.
Regional stock markets reflected those anxieties. Most Gulf equity indices fell on Sunday, and Boursa Kuwait suspended trading after Iranian retaliatory attacks on nearby U.S. targets in Gulf cities heightened fears of prolonged regional instability.
Sectors noted as impacted: energy (oil), shipping, air travel, regional equities.