Financial markets weigh up fallout from growing conflict in Middle East

• Published date: 15 April 2024
• Publication title: Irish Times (Dublin, Ireland)

When Hamas attacked Israel in October, the biggest fear for many market participants was that Iran would ultimately be drawn into the fighting. Now, as the conflict widens, many say oil could surpass $100 (€94) a barrel and expect a flight to Treasuries, gold and the dollar, along with further stock-market losses

A spike in nerves may still be tempered by Iran’s statement that “the matter can be deemed concluded” and a report that US president Joe Biden told Israeli prime minister Binyamin Netanyahu that the US won’t support an Israeli counterattack against Iran.

“Investors’ natural reaction is to look for safe-haven assets in moments like this,” said Patrick Armstrong, chief investment officer at Plurimi Wealth. “Reactions will be somewhat dependent on Israel’s response. If Israel does not escalate from here, it may provide an opportunity to buy risk assets at lower prices.”

Bitcoin gave an early insight into market sentiment. The token sank almost 9 per cent in the wake of the attacks on Saturday, only to rebound yesterday and trade near the $64,000 mark.

Stocks markets in Israel, Saudi Arabia and Qatar posted modest losses under thin trading volumes.

“Middle Eastern markets opened with relative calm following Iran’s attack, which was perceived...