The fallout from Saturday’s surprise attack on Israel by the Palestinian group Hamas reverberated through Middle East markets, sending stocks sliding and setting the tone for what’s likely to be a volatile week.
Major equities gauges in the region fell Sunday, led by a 6.4% drop on Israel’s benchmark TA-35 stock index, its biggest loss in more than three years. The Tadawul All Share Index in Riyadh fell 1.6% while stocks in Qatar and Kuwait also weakened. The EGX30 gauge in Cairo slumped 2.6% after an Egyptian policeman opened fire on a group of Israeli tourists, killing two of them, in the Mediterranean city of Alexandria.
The Hamas assaults mark the deadliest attack on Israel in decades and threaten to escalate into a broader conflict. Israeli Prime Minister Benjamin Netanyahu declared that his country would launch a prolonged military campaign against the militant group and expressed confidence Israel would win. President Joe Biden pledged “rock solid” US support for Israel.
The conflict comes at a time of diplomatic sensitivity and also a moment of historic division within Israel over Netanyahu’s coalition with Israel’s far-right and their efforts to overhaul the nation’s judiciary. The Israeli shekel has slumped toward a seven-year low in recent days, ahead of the scheduled reopening of Israel’s parliament later this month.
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