Israel, Saudi Arabia stocks rally even as US-Iran tensions escalate
What's the story
The stock markets in Israel and Saudi Arabia witnessed a surge on Sunday, as investors appeared to overlook the potential risks posed by the recent US attacks on Iran. The rally was mainly driven by bank stocks across the Middle East region. Israel's TA-35 benchmark index rose 1.2% at 11:08am (Dubai time), led by Bank Hapoalim. Meanwhile, Saudi Arabia's Tadawul All Share Index also gained 1%, with Al Rajhi Bank contributing significantly to this rise.
Market reactions
Other Middle Eastern markets show mixed responses
Other Middle Eastern markets also showed mixed responses to the US attacks on Iran. The Boursa Kuwait Premier Market Index rose 0.7% at 10:39am (Dubai time) while Muscat's MSX30 Index fell by 0.6%. Qatar's benchmark index also saw a rise of 0.7%, reflecting the overall regional trend of bank stocks leading market rallies despite geopolitical tensions.
Investor sentiment
Global investors brace for potential market turbulence
Even after the initial reactions from Middle Eastern markets, global investors are bracing for potential market turbulence. The uncertainty comes after US President Donald Trump ordered attacks on Iranian nuclear sites without Congressional approval. Money managers are now closely watching Iran's response to these strikes, including its potential move to block the Strait of Hormuz, an important passage for oil and gas shipments, and possible attacks on US assets in the region.
Retaliation threat
Iran vows to impose 'everlasting consequences' for US attacks
In response to the US strikes, Iran has vowed to impose "everlasting consequences" for the attacks and said it reserves all options to defend its sovereignty. The possible responses from Iran could include attacking US bases in the region or Israel's nuclear research center near Dimona, or even escalating its own nuclear program. This uncertainty continues to keep investors on edge amid rising geopolitical tensions.