Middle East Markets Decline amid Israel-Palestine Conflict

Israel and the Middle East stock markets dwindled amid the ongoing conflict between Israel and Palestine. Investors now expect falling stock values to experience an unstable week.

Israel’s TA-35 was down by 6.47% to ILS 1,712.16 in the closing session, falling 5.2% earlier to mark its significant loss over three years. Shares from Riyadh, Kuwait, Qatar, Oman, and Bahrain also posted losses. Egypt’s EGX30 slipped 2.60% to E£19,357.42.

Hamas’ attacks on Israel on Saturday have threatened to increase geopolitical tensions and risk a more significant conflict.

Israeli Prime Minister Benjamin Netanyahu has declared extended military action against the Palestinian militant group, expressing confidence in Israel’s victory. US President Joe Biden has also stated Washington’s full support to Israel.

The conflict started during a sensitive diplomatic period and a historic divide within Israel due to Netanyahu’s coalition with the far-right. Their efforts to introduce change to the nation’s judiciary have led to an internal disagreement.

As these events unfold, the Israeli shekel has hit a seven-year low in the days leading up to the reopening of Israel’s parliament this month. The currency was last down by 1.72% to 9.37 UAH on October 9’s afternoon session.

Dubai-based strategist Hasain Malik said Israel’s political and security structure would be overlooked while the Gaza military response is in progress. However, they would persist and remain a weakness for Israeli assets.

Israel-Palestine War Impact on Middle East Trade

According to analysts, if the Arab world becomes involved in the Israel-Palestine clash, India may need to tread carefully.

India’s trade with Israel, which reached around $10.7 billion in fiscal year 2023, may be significantly hurt if disruptions occur at the ports of Israel- Haifa, Ashdod, and Eilat.

These ports, which are the three largest, are responsible for the transit of agricultural products, chemicals, machinery, and vehicles.

Hamas’ attacks have already claimed the lives of 1,000 Israeli people. Israel on Sunday retaliated with air strikes that hit housing blocks, tunnels, a mosque, and homes of Hamas officials in Gaza. The assault has raised the death toll to over 400 people in Gaza.