Israel strikes Iran, market turmoil as stocks fall and oil, gold prices surge

Israel carried out strikes on Iran on Friday, targeting its nuclear facilities, ballistic missile factories and military commanders at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon.

Iranian media and witnesses reported explosions, including at the country's main uranium enrichment facility at Natanz, while Israel declared a state of emergency in anticipation of retaliatory missile and drone strikes.

Iran's elite Revolutionary Guards corps said its top commander, Hossein Salami, was killed, and state media reported the unit's headquarters in Tehran had been hit. Several children had been killed in a strike on a residential area in the capital, it said.

"We are at a decisive moment in Israel's history," Israeli Prime Minister Benjamin Netanyahu said in a recorded video message.

"Moments ago, Israel launched Operation Rising Lion, a targeted military operation to roll back the Iranian threat to Israel's very survival. This operation will continue for as many days as it takes to remove this threat."

Iran's Supreme Leader, Ayatollah Ali Khamenei, said in a statement that Israel had "unleashed its wicked and bloody" hand in a crime against Iran and that it would receive "a bitter fate for itself".

An Israeli military official said Israel was striking "dozens" of nuclear and military targets including the facility at Natanz in central Iran. The official said Iran had enough material to make 15 nuclear bombs within days.

The United States said it had no part in the operation, which raises the risk of a fresh escalation in tensions in the Middle East, a major oil-producing region.

Alongside extensive air strikes, Israel's Mossad spy agency led a series of covert sabotage operations inside Iran, Axios reported, citing a senior Israeli official. These operations were aimed at damaging Iran’s strategic missile sites and its air defence capabilities.

Iranian state media reported that at least two nuclear scientists, Fereydoun Abbasi and Mohammad Mehdi Tehranchi, were killed in Israeli strikes in Tehran.

Tel Aviv's Ben Gurion Airport was closed until further notice, and Israel's air defence units stood at high alert for possible retaliatory strikes from Iran.

"Following the pre-emptive strike by the State of Israel against Iran, a missile and UAV (drone) attack against the State of Israel and its civilian population is expected in the immediate time frame," Defence Minister Israel Katz said in a statement.

Israeli military Chief of Staff Eyal Zamir said tens of thousands of soldiers had been called up and "prepared across all borders".

"We are amidst a historic campaign unlike any other. This is a critical operation to prevent an existential threat, by an enemy who is intent on destroying us," he said.

Israeli Minister Gideon Saar was holding a "marathon of calls" with counterparts around the world regarding Israel's attack on Iran, the foreign ministry said in a statement.

US "NOT INVOLVED"

US President Donald Trump would convene a meeting of the National Security Council on Friday morning, the White House said. Trump said on Thursday that an Israeli strike on Iran "could very well happen" but reiterated his hopes for a peaceful resolution.

The US military is planning for the full range of contingencies in the Middle East, including the possibility that it might have to help evacuate American civilians, a US official told Reuters.

Iran's armed forces spokesperson said Israel and its chief ally, the United States, would pay a "heavy price" for the attack, accusing Washington of providing support for the operation.

While the US tried to distance itself from Israel's military operation, an Israeli official told public broadcaster Kan that Israel had coordinated with Washington on Iran.

US Secretary of State Marco Rubio said the United States was not involved in the strikes and Tel Aviv had acted unilaterally for self-defence.

"We are not involved in strikes against Iran and our top priority is protecting American forces in the region," Rubio said in a statement.

"Let me be clear: Iran should not target US interests or personnel," he added.

The State Department issued an advisory saying that all US government employees in Israel and their family members should "shelter in place until further notice".

The attacks triggered sharp falls in stock prices in Asian trade on Friday, led by a selloff in US futures, while oil prices jumped as investors scurried to safe havens such as gold and the Swiss franc.

UN Secretary-General Antonio Guterres condemned any military escalation in the Middle East, said deputy UN spokesperson Farhan Haq.

"The Secretary-General asks both sides to show maximum restraint, avoiding at all costs a descent into deeper conflict, a situation that the region can hardly afford," Haq said.

NUCLEAR TALKS

US and Iranian officials were scheduled to hold a sixth round of talks on Tehran's escalating uranium enrichment programme in Oman on Sunday, according to officials from both countries and their Omani mediators.

A US official said those talks were still scheduled to proceed despite the Israeli attack.

The Israeli military said on Friday that it was forced to act based on new intelligence information showing that Iran was "approaching the point of no return" in the development of a nuclear weapon.

"In recent months, this program has accelerated significantly, bringing the regime significantly closer to obtaining a nuclear weapon," it said in a statement, without disclosing the purported evidence.

A source familiar with US intelligence reports said there had been no recent change in the US intelligence assessment that Iran was not building a nuclear weapon and that Khamenei had not authorised the restarting of the nuclear weapons programme that was shuttered in 2003.

Oman, a mediator in the Iran-US nuclear talks, said the Israeli attack "threatens to eliminate diplomatic solutions and undermine security and stability of the region", according to the Omani state news agency.

Stocks tumble, oil soars as Israel's strike on Iran roils investors

Stocks dived in Asian trade on Friday, led by a selloff in Wall Street futures, while oil prices surged after Israel conducted a military strike on Iran, sending investors scurrying to safe havens such as gold and the Swiss franc.

The escalation in hostilities in the Middle East - a major oil-producing region - adds a fresh layer of uncertainty for financial markets at a time of heightened pressure on the global economy from US President Donald Trump's aggressive and erratic trade policies.

Market reaction was swift. Crude oil jumped about 9%, with Brent futures rallying $6 to $75.36 per barrel and WTI futures $6.16 higher at $74.20 per barrel by 0228 GMT. Gold climbed 1.5% to about $3,434 per ounce, taking it closer to the record high of $3,500.05 from April.

US S&P E-mini futures slumped 1.7% and Nasdaq futures skidded 1.8%. Pan-European STOXX 50 futures tumbled 1.6%.

Japan's Nikkei lost 1.3%, South Korea's KOSPI dropped 1.1%, and Hong Kong's Hang Seng declined 0.8%.

"The geopolitical escalation adds another layer of uncertainty to already fragile sentiment," said Charu Chanana, chief investment strategist at Saxo, adding that crude oil and safe-haven assets will remain on an upward trajectory if tensions continue to intensify.

Global stock markets had been poised for a fall following an almost unbroken rally since early April that took the MSCI All-Country World index to an all-time high this week, according to Jessica Amir, a strategist at MooMoo.

"There's room for fat to be taken off the table," she said.

"It just appears that this is the catalyst that will probably send equities down lower."

Israel said it was declaring a state of emergency in anticipation of a missile and drone strike by Tehran, after what it called a "preemptive strike" over Iran's nuclear programme.

Iranian state media confirmed on Friday the killing of Iran's Revolutionary Guards Commander Hossein Salami in the Israeli strike.

An Israeli defence official had earlier said members of Iran's general staff, including the chief of staff and several senior nuclear scientists, were likely killed.

US Secretary of State Marco Rubio called Israel's strikes against Iran a "unilateral action" and said Washington was not involved.

Tensions had been building as Trump's efforts to reach a nuclear deal with Iran appeared to be deadlocked. US and Iranian officials were scheduled to hold a sixth round of talks on Tehran's escalating uranium enrichment programme in Oman on Sunday, according to officials from both countries and their Omani mediators.

US Treasuries were bought in the rush for safer assets, sending the yield on 10-year notes to a one-month low of 4.31%.

The Swiss franc gained about 0.4% to 0.8072 per U.S. dollar, and fellow safe haven the yen appreciated 0.3% to 143.12 per dollar.

Some traders were also attracted to the dollar as a haven, with the dollar index up 0.5% to 98.131.

The euro eased 0.4% to $1.1538, giving back a little of its 0.9% overnight jump to the highest since October 2021.

Sterling slipped 0.5% to $1.3554, after marking a fresh high since February 2022 at $1.3613 early in the day.

"While we await further news and a potential response from Iran, we are likely to see a further deterioration in risk sentiment as traders cut risk-seeking positions ahead of the weekend," said Tony Sycamore, an analyst at IG.

Reuters