Algerian Radio
Global stock markets are deepening their losses this Tuesday, weighed down by the military escalation in the Gulf. The conflict has revived fears of widespread inflation driven by surging energy prices and has significantly pushed up government bond yields.
Around 11:00 GMT, the Frankfurt Stock Exchange shed 3.70% after briefly losing more than 4%, while the Paris Bourse fell 2.78% shortly after plunging over 3%. London dropped 2.81%, and Milan plummeted by 4.33%.
In Asia, the Seoul Stock Exchange ended the session with a 7.24% crash, while Tokyo lost 3.06%. The Shenzhen Stock Exchange also shed 3.07%.
On Wall Street, futures for the three main indices signaled a sharp decline at the opening: the Nasdaq fell 2.48%, the S&P 500 dropped 1.94%, and the Dow Jones slipped 1.82%.
Analysts noted that geopolitical risks continue to rattle financial markets as both stocks and bonds post sharp declines for the second consecutive day.
According to market experts, rising energy prices are exerting upward pressure on inflation, particularly in the short term. This could trigger a "stagflationary event" for Europe—a period of sustained high inflation combined with fragile economic growth.
Higher inflation reduces the real value of payments made by borrowers to their creditors. Consequently, lenders demand higher interest rates to compensate for this loss. As a result, investors have been offloading government bonds since the start of the week, causing interest rates to rise.
The yield on the 10-year German government bond, considered the European benchmark, stood at 2.79% around 11:15 GMT, up from 2.71% at Monday's close. Its Italian equivalent reached 3.49%, compared to 3.35% on Monday. Outside the eurozone, the British 10-year rate hit 4.52%, up from 4.37% at Monday’s close.
