Written by Federico Maccioni and Alan John
DUBAI/LONDON (Reuters) – Gulf markets fell slightly on Sunday as investors prepared for the resumption of trading in most markets from Monday, with a particular focus on oil, but this came as a result of a precedent-setting move by Iran over Israeli territory. This provides an early indication of investors’ reactions to attacks that have not occurred.
Trading could be volatile as traders digest last week’s global macroeconomic data, most importantly higher-than-expected US inflation.
Saudi Arabia’s benchmark stock index ended 0.3% lower, recovering from an earlier steep decline, while Qatar’s main stock index fell 0.8%.
Shares in the Tel Aviv Market Composite Index rose 0.3%.
Iran fired explosive drones and missiles at Israel on Saturday in retaliation for an apparent Israeli attack on its consulate in Syria, and on Sunday threatened Israel and the United States with a “larger response” if there was retaliation. I warned you.
“The operation is not over yet,” Israel said.
“The question is whether Israel is looking to escalate the conflict. That’s the wild card,” said Tina Fordham, geopolitical strategist at Fordham Global Foresight in London.Oil prices are expected to rise on Monday. He added that he expected it.
Oil prices had already been supported last week by concerns about Iran’s response, with the global benchmark hitting $92.18 a barrel on Friday, the highest since October.
Some haven assets also rose on Friday as traders were wary of exposure to developments over the weekend when markets were closed. The benchmark, which moves inversely to prices, fell nearly 8 basis points, the biggest single-day drop in a month. [US/]
Meanwhile, gold rose above $2,400 an ounce, hitting a series of all-time highs. [GOL/]
is one of the few assets that trade around the clock, and fell 8% in about 20 minutes to below $62,000 at around 2000 GMT on Saturday when reports of an attack in progress emerged. Ta.
The stock price has since recovered to some extent and was most recently trading at around $64,500.
fragile environment
But geopolitics wasn’t the only thing on investors’ minds on Monday.
“The news flow is about Iran and Israel, so that’s going to be most of what people will be discussing on Monday, but we’re still going to have a lot of US inflation news and what it means for America. “The Federal Reserve is in an environment that we don’t yet understand,” Sammy Chaar, Geneva-based chief economist at Lombard Odier, said on Sunday.
“This weekend saw some geopolitical stress in the wake of the CPI report. Market conditions are fragile in the short term, but after a great period, some vulnerability is natural.”
Since Iran-backed Hamas attacked Israel on October 7 and Israel invaded Gaza in response, MSCI’s global stock index has been buoyed by solid economic data, particularly in the United States, and expectations for interest rate cuts from major central banks. , reached a new high.
Saudi Arabia’s main index is up about 20% since Oct. 8, while Qatar’s benchmark index is trading at about the same level as Oct. 8.
Geopolitics is also just one unpredictable factor to consider, with some international investors focusing on the broader economic situation.
“I’m not going to be an armchair general and pretend I have an advantage over how things escalate,” said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore. Told.
“From our perspective, the more important news for markets last week was the re-acceleration trend in consumer price inflation and its implications for future short-term interest rate trends.”
