Aerial view of Mt. Fuji, Tokyo Tower and modern skyscrapers in Tokyo on a sunny day.
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Asia-Pacific markets fell Friday as Israel conducted a military strike on Iran, targeting its nuclear program.
Japan’s benchmark Nikkei 225 fell 1.28% while the Topix lost 1.22%. South Korea’s Kospi was 0.83% lower and the small-cap Kosdaq declined 1.82%.
Australia’s S&P/ASX 200 traded flat.
Futures for Hong Kong’s Hang Seng index last traded at 24,178, compared with the HSI’s last close of 24,035.38.
Israel’s defense minister announced a ‘special situation’ after Israel attacked Iran. The Israeli military has begun airstrikes against Iran, two U.S. officials told NBC News. The officials added that there was no U.S. involvement.
Defense Minister Israel Katz said, “Following the State of Israel’s preemptive strike against Iran, a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future.
Oil prices jumped more than 7%. U.S. West Texas Intermediate rose $5.22, or 7.67%, to $73.26 per barrel, while global benchmark Brent jumped $5.01, or 7.02%, to $74.23 per barrel.
“The market has largely been shrugging off geopolitical risk for the last year, and these development have been a wakeup call that these risks are more tangible and imminent than many expect,” Saul Kavonic, head of energy research at MST Marquee told CNBC via email.
“It is possible these attacks could be calibrated to add pressure on U.S. Iran negotiations and the situation subsequently de-escalate,” he said.
U.S. stock futures slid on Thursday night as tensions in the Middle East worsened.
U.S. producer prices in May rose just 0.1% from the previous month, coming in cooler than the 0.2% jump expected by economists surveyed by Dow Jones. The softer reading helped boost major stock indexes, while bond yields declined, improving investor sentiment. This followed a cooler-than-expected consumer inflation report earlier in the week.
Overnight stateside, all three key benchmarks closed higher. The S&P 500 rose, helped by a rally in Oracle that lifted the big tech sector. The benchmark climbed 0.38% to close at 6,045.26. The broad market S&P 500 now sits less than 2% off its record high. The Nasdaq Composite gained 0.24% and ended the day at 19,662.48. The Dow Jones Industrial Average added 101.85 points, or 0.24%, settling at 42,967.62.
— CNBC’s Riya Bhattacharjee, Lisa Kailai Han, Pia Singh, Sean Conlon contributed to this report.
