Markets reel as Israel-Iran conflict escalates: Stock markets across the region tumbled yesterday as the deepening conflict between Israel and Iran triggered a regional sell-off and fresh fears over energy supply, Bloomberg reports.

Egypt’s EGX30 led the losses, falling as much as 7.7% in intraday trading on Sunday — its steepest decline in five years — before trimming losses to 4.6% at market close. The plunge came after Israel halted gas production from its largest offshore field, cutting off supplies to Egypt and stoking fears of a near-term energy crunch in the import-dependent economy. The EGP also weakened further on the parallel market, with local-bank quotes showing trades at around 50.70 per USD yesterday down from roughly 49.80 last week.

Oil cushions the blow for Aramco as TASI slides: In Saudi Arabia, the Tadawul All Share Index (TASI) plunged 3.6% at the open, with 243 of 253 stocks in the red, though losses were pared by state-owned oil giant Aramco, which gained 1.7% on the back of sharp rally in oil. TASI ended the day down 1% yesterday. Brent crude prices spiked by more than 7% to settle near USD 73 on Friday, as market prices in the risk of further disruption to Iranian exports.

UAE markets also priced in the risk on Friday: The UAE markets, which reopen today, had already closed down on Friday, with the DFM falling 1.9% and the ADX losing 1.3%, in anticipation of a wider fallout.

Also from the region: Kuwait’s main index closed down 3.9%, while the Muscat Stock Exchange lost 0.9% and Bahrain’s benchmark dropped 0.8%, respectively. In Tel Aviv, large-cap stocks opened 1.5% lower, though losses were partially offset by a rally in defense contractor Elbit Systems to close 0.5% higher.

Airlines and lenders were among the hardest hit across the Gulf, Reuters reports, with Qatar National Bank (QNB) opening down 3.3% on the Qatar Exchange yesterday, and Jazeera Airways shedding as much as 10% on the Boursa Kuwait amid widespread regional airspace avoidance. In the UAE, real estate companies were also impacted, with developers Emaar Properties and Union Properties closing down 3.5% and 6.9%, while Abu Dhabi's Aldar also dropped 3.9%.

Zooming out: The latest wave of volatility comes as MENA equities continue to underperform global peers this year, pressured by geopolitical overhang, oil-price swings, and mixed fiscal signals in large economies like Saudi Arabia.

MARKETS THIS MORNING-

Asian markets are bucking the trend today, with most of them in the green as investors await data out of China. Japan’s Nikkei is up 0.9%, while South Korea’s Kospi is up nearly 0.6%. Hong Kong’s Hang Seng futures indicate a weaker open. Over on Wall Street, futures point to a slightly stronger open after yesterday’s Iran-Israel conflict-triggered sell-off.

EGX30

31,016

-4.6% (YTD: +4.3%)

USD (CBE)

Buy 50.55

Sell 50.69

USD (CIB)

Buy 50.56

Sell 50.66

Interest rates (CBE)

24.00% deposit

25.00% lending

Tadawul

10,732

-1.0% (YTD: -10.8%)

ADX

9564

-1.3% (YTD: +1.5%)

DFM

5365

-1.9% (YTD: +4.0%)

S&P 500

5977

-1.1% (YTD: +1.6%)

FTSE 100

8851

-0.4% (YTD: +8.3%)

Euro Stoxx 50

5290

-1.3% (YTD: +8.1%)

Brent crude

USD 74.23

+7.0%

Natural gas (Nymex)

USD 3.58

+2.6%

Gold

USD 3452.80

+1.5%

BTC

USD 104,792.80

-0.5% (YTD: +12.0%)

S&P Egypt Sovereign Bond Index

877.27

+0.1% (YTD: +12.8%)

S&P MENA Bond & Sukuk

144.23

-0.1% (YTD: +3.1%)

VIX (Volatility Index)

15.54

+15.5% (YTD: +20.0%)

THE CLOSING BELL-

The EGX30 fell 4.6% at yesterday’s close on turnover of EGP 4.1 bn (14.3% below the 90-day average). Foreign investors were the sole net sellers. The index is up 4.3% YTD.

In the red: EFG Holding (-12.4%), Orascom Development Egypt (-11.1%), and GB Corp (-9.4%).

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