The Israeli actions reached record maximums on Sunday (22), after the US attacks Iran’s nuclear facilities in attacks that, according to investors, would probably prevent Tehran from developing nuclear weapons soon.
The large Tel Aviv 125 index closed up 1.8%, raising gains to almost 8%last week, while the Blue Chip TA-35 index has advanced 1.53%, keeping the way for the largest quarterly advance since 2003.
In Israel, banks were responsible for most earnings, while defense supplier Elbit Systems Inc. fell more than 2%.
In the wake of Israeli attacks on Iran, the shares rose during all five sessions last week, valuing about 6%, with Israel reaching Iranian nuclear and military targets before the US surprise attacks on Saturday.
“The destruction of Iran’s major nuclear facilities by US military is, of course, positive development… In terms of improving the regional security environment and reducing Iran’s military and nuclear capacities,” Mizrahi Tefahot market-chief economist Ronen Menachem said. “It’s a watershed.”
Israel began its attacks on Iranian nuclear facilities, ballistic missile factories and military commanders on June 13, which were received with retaliatory Iranian attacks against Israel.
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US President Donald Trump, He said he “obliterate” Iran’s main nuclear facilities in Saturday night attacks with huge bunker destructive bombs, joining an Israeli attack on a significant new climbing of the Middle East conflict. Tehran promised to defend herself and responded with a missile sky against Israel, who injured dozens of people and destroyed buildings in Tel Aviv on Sunday.
Still, for over a week, local markets reacted discharged to Israel’s actions in Iran.
In addition to the earnings of stock, the government’s titles prices rose, Shekel valued and the Israeli risk award fell slightly.
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Title prices rose up to 0.2% on Sunday. Shekel (Israel’s official currency) is not negotiated on Sunday, but it was 3.61 per dollar on June 11 to 3.48 on Friday and accumulates high of about 1% this month.
“Looking at the medium and long term – which is relevant to many strategic investors – this can represent a genuine opportunity, possibly related to the perspective of narrower ties between the Saudi and American axes,” said Menachem. “The question is, and to what extent last week’s strong gains have already priced the situation. A plausible scenario includes at least in the initial response, new increases in actions, corporate titles and government titles.”
“Markets are focused on whether the war will spread to other countries and there is still no evidence of it,” Tellimer’s strategist Hasnain Malik told Bloomberg Hasnain Malik. “The positive interpretation is that US intervention will accelerate the end of the war. This, of course, is not known yet.”
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“The market demonstrates cautious optimism in the face of the reality of security,” said Yaniv Pagot, vice president of negotiating at the Tel Aviv Stock Exchange, in a statement. “The highs reflect an improvement in the Israel State Risk Award.”
In addition to Israel, the Egyptian stock reference rate recorded a 2.7%leap, with investors from the region, betting that US attacks on Iran can accelerate the end of the conflict between the country and Israel.
Other markets in the region recorded modest gains. The Boursa Kuwait Premier Market index and the MSX30 in Muscat index rose 0.4% each. The Qatar’s reference index rose 0.2%. The Tadawul All Share index of Saudi Arabia fell 0.3%.
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Regardless of the initial reaction in the Middle East, global investors are preparing for market turbulence that can trigger a safe running on Monday. Resource managers are now attentive to Iran’s potential response, including the possibility of trying to block Ormuz Strait – a key passage to oil and gas – and will attack US assets in the region.
“In the short term, markets such as gross oil will depend on the retaliation of Iran and the expansion of war to impact oil supply rather than retreating and offering concessions on its nuclear program,” said Malik of Tellimer. “The biggest risk to the region is the collapse of the Iranian regime and a decay to a Syrian -like civil war. US intervention can increase the likelihood of this.”
(with Reuters and Bloomberg)
