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Financial markets reacted sharply Friday to Israeli "preemptive" strikes against Iranian nuclear and military sites. Oil prices surged, stocks tumbled, and a widespread sell-off ensued as investors braced for a potential full-scale war. Concerns were amplified by the possibility of Iranian retaliation and President Trump's warning of a "massive conflict" in the region.
While Tel Aviv said it had struck military and nuclear targets, Iran said residential buildings had been hit. Israeli Prime Minister Benjamin Netanyahu said in a video statement:
"This operation will continue for as many days as it takes to remove this threat.
"We struck at the heart of Iran's nuclear enrichment programme. We targeted Iran's main enrichment facility at Natanz. We also struck at the heart of Iran's ballistic missile programme," he added.
Iranian nuclear scientists "working on the Iranian bomb" had also been hit, he said.
Israeli Defence Minister Israel Katz cautioned that "a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future".
Trump had previously warned that an attack could be on the cards, telling reporters at the White House: "I don't want to say imminent, but it looks like it's something that could very well happen." The US leader said he believed a "pretty good" deal on Iran's nuclear programme was "fairly close", but that an Israeli strike on the country could wreck the chances of an agreement.
A US official said there had been no US involvement in the operation. Still there are worries the United States could be sucked into the crisis after Iran threatened this week to target US military bases in the region if a regional conflict broke out.
Both main oil contracts, which had rallied earlier in the week on rising tensions, spiked more than eight percent amid fears about supplies of the commodity.
The rush from risk assets to safe havens saw equity markets across Asia tumble and bonds rally with gold. US and European equity futures were deep in the red.
