Sat, May 18, 2024

Markets Waver as Iran-Israel Tensions Flare Up

Diverse Israeli Tech becomes available for New Gulf Allies

Quick Look:

  • Saudi & Qatari indices are down, with Saudi -1.8% and Qatari -1.6% due to Iran-Israel tensions.
  • Bahrain’s index is up 0.9%, contrasting regional downtrends.
  • Brent crude at $90.45, a six-month high amid conflict.
  • As investors seek stability, gold peaks at $2400, a new record.
  • Mixed global reactions as MSCI index hits highs, Gulf markets falter.

In early trading, influenced by the repercussions of Iran’s attack on Israel, Saudi Arabia’s benchmark stock index dropped by 1.8%, while the main Qatari index also fell by 1.6%. Conversely, Bahrain’s main index bucked the downward trend with a 0.9% increase.

Meanwhile, Brent crude futures climbed to $90.45 a barrel, marking a six-month high. This surge was driven by concerns over the ongoing Iran-Israel conflict. Gold prices surged to a record high, surpassing $2400 an ounce, as investors flocked to the metal as a safe-haven asset amid the geopolitical unrest.

Saudi Index Rises 20%, Qatar Falls 0.8% Over 6 Months

Looking at longer-term trends, from October 8 to April 4, Saudi Arabia’s’ main index saw a remarkable 20% rise, largely due to optimistic trading ahead of the Eid al-Fitr holidays. However, Qatar’s’ benchmark index slightly declined by 0.8% in the same period, indicating a mixed regional economic outlook. Moreover, Kuwait’s’ benchmark and Oman’s’ indexes mirrored the general dip experienced across Gulf markets, dropping by 0.9% and 0.2%, respectively.

Expert Views on Equities and Safe-Haven Assets

The global market reaction has been notably mixed. The MSCI’s global share index hit new highs, reflecting a resilient global market outlook despite the regional turmoil. However, on Sunday, Gulf markets took a downturn in early reactions to the unprecedented attack on Israeli territory by Iran, marking a day of significant losses. In Israel, the Tel Aviv stock indexes remained flat to marginally lower in early trading following the conflict, indicating a cautious stance from investors.

Iran-Israel Tensions Escalate After Drone Attacks

A sequence of military actions, starting with Israel’s invasion of Gaza on October 7, Israel’s to an attack by Iran-backed Hamas, sparked regional volatility. To escalate mentions further, a retaliatory drone and missile attack by Iran followed this military action. Therefore, as markets navigate through these turbulent times, the economic implications of the conflict and its potential resolutions remain a critical focal point for investors globally.

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