Bank of America warns of a bloodbath in oil-importing countries' stock markets, with safe-haven funds shifting towards US technology and defense.

Michael Hartnett of Bank of America stated that a protracted war with Iran poses a risk to the rebound in Japanese and European bank stocks, as investors are abandoning these markets in favor of oil and the US dollar. The strategist noted that investors may shift towards assets of “beneficiaries of a long-term conflict,” at the cost of sacrificing “oil-importing countries with minimal energy stock exposure,” such as South Korea, Japan, and Europe. US technology stocks and the global defense industry are sectors likely to benefit from this rotation. This has already begun to emerge since the US and Israel launched attacks on Iran and the conflict escalated. European stocks are heading for their worst weekly decline since the tariff turmoil last April, as is Japan's Nikkei 225 index. South Korean stocks experienced sharp fluctuations, with the KOSPI index recording both a record drop and its largest single-day gain since 2008. (Jinshi)