Gulf Stocks Drop as U.S.-Iran Tensions Dominate: Inside EM
Most Gulf Stocks Drop as U.S.-Iran Tensions Dominate: Inside EM
(Bloomberg) -- Stock markets in the Gulf declined as tension between the U.S. and Iran kept investors on high-alert.
President Donald Trump said the U.S. will impose major new sanctions on Iran Monday, days after he abruptly called off a plan for airstrikes against the Islamic Republic, but gave no additional detail. The United Arab Emirates civil aviation authority ordered carriers to avoid risky air space, with Emirates and Etihad Airways re-routing flights away from areas of possible conflict.
The warning of new sanctions “could be a reasonable settlement under the pretense that oil needs to continue flowing from the Gulf to the world,” said Mohammed Ali Yasin, the chief strategy officer at Al Dhabi Capital in Abu Dhabi. “If the pressure continues to be diplomatic, the status quo will continue. But it it becomes military action, it will affect every sector except telecoms.”
The fact that some local airlines have followed other carriers in changing flight paths has “scared people that military strikes are closer than ever before,” Yasin said.
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MIDDLE EASTERN MARKETS
- The Tadawul All Share Index ends 1.5% lower, dropping more than any other in the Middle East
- Sipchem dropped for a fourth session. It plans periodic turnaround maintenance for three plants starting this week, with financial impact to be reflected on 3Q results
- National Agricultural Development Co. declined 5% after abandoning plans to acquire a Danone unit in the kingdom
- MORE: The Impact of Falling Rates on Gulf Banks
- Kuwait’s main equities gauge finishes down 0.4%. It’s still up 20% this year, more than any other major peer in the region
- Index compiler MSCI Inc. to announce on June 25 after local markets close whether to upgrade Kuwait from frontier to its emerging market group
- In Turkey, President Recep Tayyip Erdogan is the man with the most at stake in Sunday’s rerun of the Istanbul mayoral election
- READ: Stakes are High for Erdogan as Istanbul Heads for a Revote
- MORE: Mideast Plan to Be Unveiled to Leaders in Business and Politics
To contact the reporter on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Nicholas Larkin, James Amott
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