Most Gulf markets in red amid escalating Israel-Iran conflict
June 18 (Reuters) - Most stocks markets in the Gulf fell in early trade on Wednesday with investors exercising restraint due to fighting between Iran and Israel that entered a sixth day, sparking fears of potential regional instability.
Thousands of people were fleeing Tehran and other major cities, Iranian media reported, as Iran and Israel launched new missile strikes at each other despite U.S. President Donald Trump calling for Tehran's unconditional surrender.
Saudi Arabia's benchmark index (.TASI), opens new tab dropped 0.7%, weighed down by a 0.6% fall in Al Rajhi Bank (1120.SE), opens new tab and 1% decrease in the country's biggest lender Saudi National Bank (1180.SE), opens new tab.
Among other losers, Prince Waleed bin Talal-backed airline Flynas Company (4264.SE), opens new tab plunged about 13% in debut trade.
The Saudi Exchange allows 30% fluctuation limits during the first three days of trade.
Elsewhere, oil behemoth Saudi Aramco (2222.SE), opens new tab was down 0.6%.
Oil prices - a catalyst for the Gulf's financial markets - eased in Asian trade, after a gain of 4% from the previous session, as markets weighed the chance of supply disruptions from the Iran-Israel conflict against a U.S. Federal Reserve interest rate decision that could weigh on oil demand.
Dubai's main share index (.DFMGI), opens new tab lost 0.6%, with toll operator Salik (SALIK.DU), opens new tab declining 2.1% and sharia-compliant lender Dubai Islamic Bank (DISB.DU), opens new tab retreating 1.6%.
The Qatari index (.QSI), opens new tab fell 0.1%, hit by a 1.6% fall in Commercial Bank (COMB.QA), opens new tab.
In Abu Dhabi, the index (.FTFADGI), opens new tab edged 0.1% higher.
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Reuters
an hour ago
- Reuters
Morning Bid: Oil ebbs again as Fed meets
LONDON, June 18 (Reuters) - What matters in U.S. and global markets today I'm excited to announce that I'm now part of Reuters Open Interest (ROI), opens new tab, an essential new source for data-driven, expert commentary on market and economic trends. You can find ROI on the Reuters website, opens new tab, and you can follow us on LinkedIn, opens new tab and X., opens new tab The alarming Israel-Iran war is keeping world oil prices volatile, but crude moves have not yet hit red-alert territory, and markets are now turning their attention to Wednesday's Federal Reserve policy decision. I'll discuss this and all of the market news below. Be sure to check out today's column, where I explain why the dollar's decline may persist despite signs that 'short dollar' is already a crowded trade. Today's Market Minute * Thousands of people were fleeing Tehran on Wednesday after U.S. President Donald Trump said they should leave the capital, while a source said Trump was considering options that include joining Israel in attacking Iranian nuclear sites. * Oil prices eased in Asian trade on Wednesday, after a gain of 4% in the previous session, as markets weighed the chance of supply disruptions from the Iran-Israel conflict against a U.S. Federal Reserve rates decision that could impact oil demand. * While global energy markets are not yet pricing in worst-case scenarios for the Israel-Iran war, oil tanker rates are providing a good real-time gauge of the escalating risks, writes ROI columnist Ron Bousso. * Energy equity investors are adjusting their positions in an attempt to pick winners and cut losers as President Donald Trump's tax-and-spending bill makes its way through the U.S. Congress. Read the analysis from ROI energy transition columnist Gavin Maguire. * As debate rages around 'de-dollarization' and the world's appetite for dollar-denominated assets, one major cohort of overseas investors appears to be quietly backing away from U.S. securities: central banks. Check out the latest from ROI markets columnist Jamie McGeever. Oil ebbs again as Fed meets The intensity of the Middle East conflict went up several more notches overnight amid speculation the U.S. military would join the attacks on Iran. The central question now is whether the U.S. air force would be involved in any attempt to take out Iran's underground nuclear enrichment facilities, particularly the Fordow plant. An Israeli military strike on Iran's nuclear complex at Natanz directly hit the underground uranium enrichment operation there, the U.N. nuclear watchdog said on Tuesday, after initially reporting only indirect damage. Markets have to calculate whether we're apt to see a long drawn-out war and related energy disruptions or a shorter and more decisive outcome that could limit any hit to Iranian crude supply. Back home in the U.S., any energy shock would be economically and politically sensitive. And it's unclear how much public support there would be for involvement in the sort of foreign wars Trump campaigned to keep America out of. So far, U.S. crude prices remain relatively contained despite the war, slipping back slightly again on Wednesday to just under $75 per barrel. Even though spot prices have risen about 14% since the start of last week, they have not breached intraday highs set last Friday nor the $80-plus peak hit in January, and they also remain down 7% year on year. What's more, crude prices remain below the average of the past two years since the latest wave of Middle East conflict was triggered by Hamas's Oct 7, 2023 attack on Israel. Gold price moves have also been moderate over the past week, as the prices of the safe haven have failed to hit new records set in April and slipped on Wednesday. The dollar (.DXY), opens new tab and Swiss franc both edged lower again too today, the latter impacted by a likely interest rate cut to zero from the Swiss National Bank tomorrow. U.S. stock futures were higher ahead of the open after a near 1% drop in the S&P 500 index on Tuesday. The Fed decision, press conference and new economic projections later today will keep many markets in check, however, not least as they come before the U.S. 'Juneteenth' public holiday and market closures on Thursday. No change in the Fed policy rate is expected, especially now that the edgy energy outlook is adding to the already uncertain U.S. import tariff picture. But the Fed's nods and winks about its future course will be crucial as always, not least its 'dot plot' of policymakers' expectations on future rate moves. The most recent set of quarterly projections penciled in two more rate cuts by year-end, but there's some speculation that may be reduced to one in today's update. As of Wednesday, futures markets were pricing in 45 basis points of easing by December. Treasury yields fell back ahead of the meeting, following a series of soft U.S. economic readings for May on retail, industrial activity and housing. Treasuries got an additional lift as the Fed announced a board meeting for June 25 to consider plans to ease leverage requirements on larger banks, kicking off what is expected to be a broad effort to reconsider bank rules. Changes to the so-called "supplementary leverage ratio," which requires banks to set aside capital against assets regardless of their risk, could enable banks to hold more Treasuries. Elsewhere, stocks were mixed to higher around the world, with Hong Kong (.HSI), opens new tab underperforming and European defense stocks (.SXPARO), opens new tab a big gainer. Sweden's crown weakened after the Riksbank cut its key interest rate to 2.0% from 2.25% as expected on Wednesday, saying it may ease further before the end of the year. And Bitcoin remained relatively subdued even after the U.S. Senate on Tuesday passed a bill to create a regulatory framework for dollar-pegged cryptocurrency tokens known as stablecoins, seen by some as a watershed moment for digital assets. In today's deep dive, I look at whether the dollar's steep losses this year may already have run their course or whether this is longer-term exit from the currency. Chart of the day Much like world oil prices, freight rates out of the Persian Gulf have jumped sharply since the start of the Israel-Iran war on June 13. But also like crude prices, these shipping rates have so far failed to even hit their highest points for the year to date, never mind longer-term historical highs. Concerns about shipping disruption and energy supplies have clearly risen, but with too many contrasting scenarios for the conflict's outcome still in play, traders may be wary of betting one way or the other. Today's events to watch * U.S. May housing starts, weekly jobless claims (8:30 AM EDT), April TIC data on foreign holdings of Treasury securities (4:00 PM EDT) * Federal Reserve's Federal Open Market Committee policy decision (2:00 PM EDT), news conference from Fed Chair Jerome Powell and policymakers' new economic and rates projections * European Central Bank Vice President Luis de Guindos and heads of central banks of Italy, Spain, Netherlands, France and Germany meet students in Milan; ECB chief economist Philip Lane speaks in Amsterdam; Bank of Canada governor Tiff Macklem speaks * U.S. corporate earnings: Progressive Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias. Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here.
Times
3 hours ago
- Times
Israel-Iran latest: UK sends military support as defensive missiles ‘run low'
Thousands of people are fleeing Tehran and other major Iranian cities. Heavy traffic was reported on roads heading from the capital towards northern provinces. Limits have been placed on fuel purchases. Mohsen Paknejad, the oil minister, told state TV that restrictions were to prevent shortages but there would be no problems with supply. Ali Bahreini, Iran's ambassador to the UN in Geneva, went on to accuse Israel of a 'war against humanity'. He said: 'The deliberate targeting of Iran's nuclear facilities not only constitutes a grave violation of international law and UN charter but also risks exposition of all people in our neighbourhood to possible hazardous leak. This is not an act of war against our country, it is war against humanity'. He also criticised the failure of states to condemn Israel's attacks. 'We are hearing almost nothing from those self-proclaimed champions of human rights.' Iran says it has conveyed to Washington that it will respond firmly to the United States if it becomes directly involved in Israel's military campaign. Ali Bahreini, Tehran's ambassador to the UN in Geneva, said that he saw America as 'complicit in what Israel is doing'. So far, the US has taken only indirect action such as helping to shoot down missiles fired toward Israel. It is also deploying more fighter aircraft to the Middle East and extending the deployment of other warplanes. Bahreini said Iran would also respond strongly to Israeli strikes. 'We will not show any reluctance in defending our people, security and land — we will respond seriously and strongly, without restraint.' The FTSE 100 defied the conflict in the Middle East to start the session in positive territory, as defence-facing stocks sustained gains and anxiety eased over international travel. London's blue chip index was up 0.25 per cent, or 21 points, to 8,855 as trading got underway. Aerospace engineers Melrose (up 3.6 per cent), Babcock (up 1.2 per cent) and Rolls-Royce (up 0.99 per cent) led the way, with British Airways owner IAG reversing several days of decline to add 1 per cent. Almost 800 Chinese citizens have been evacuated from Iran since Israel launched military strikes against the country last week. 'Currently … 791 Chinese nationals have been relocated from Iran to safe areas,' Guo Jiakun, the foreign ministry spokesman, said. 'More than 1,000 other people are in the process of relocating and withdrawing.' Some Chinese citizens had also left Israel, he said. 'China expresses its thanks to the relevant countries for providing full support and assistance,' he said. By Liz Cookman Russia believes Israel's strikes on Iran's nuclear facilities are pushing the world toward a 'nuclear catastrophe'. Moscow's foreign ministry called the strikes 'illegal from the point of view of international law' and said they would 'create unacceptable threats to international security and push the world towards a nuclear catastrophe, the consequences of which will be felt everywhere, including in Israel itself'. Maria Zakharova, the ministry's spokeswoman, said that Iran 'had, has and will have the right' to 'peaceful' nuclear facilities. She told Sputnik radio: 'This all leads not just to escalation, but to a direct threat to the region and the world due to the fact that strikes are being carried out on peaceful atomic or nuclear facilities. The nuclear threat has a practical, not a hypothetical dimension.' Russia has repeatedly made veiled threats concerning the use of its own nuclear weapons in relation to the war in Ukraine. By Gabrielle Weiniger in Tel Aviv British Jews stranded in Tel Aviv after five days of Iranian missile bombardment are wondering how to return to the UK. Karen Tuhrim said: 'Having driven myself mad, I'm going to book the Sharm el-Sheikh flight because we've got very good friends here from London and … they're on that flight on the first of July. Even though things might change, I have to have something concrete booked. I can't stay in a hotel indefinitely.' The Barzilay family arrived in Israel to surprise their father on his 60th birthday and were supposed to leave today. Simon Barzilay said: 'It looks as though we'll be staying a lot longer. Initially, having to get up two or three times during the night to go to the bomb shelter was a scary experience, but we quickly got used to it.' The British authorities have advised those stranded to follow guidelines on the Foreign Office website. At least 2,800 stranded Israelis are expected to be repatriated today. The first two flights bringing Israeli citizens home from Larnaca, Cyprus, have landed at Ben Gurion airport. Between 100,000 and 150,000 Israelis have been unable to return since the air war led to the closure of Israeli Kedmi, chief executive of Israel Airports Authority, said: 'Our aim is to bring back as many people as possible, but it is more important that they are safe. We are carrying out assessments on an hourly basis.' Matthew Pennycook has told Times Radio that Britain is 'sending military assets to the region to support regional security in general terms — contingency support throughout the Middle East should the escalation of the conflict continue'. Pennycook, the housing minister, said he would not comment on future operational decisions or specific decisions. 'We obviously already have RAF jets in the region as part of our operation against Daesh. So it's right that they are protected. So we have already sent military assets to the region,' he said. Israel's foreign minister Israel Katz has alluded to the collapse of the Iranian government in a post on X. 'A tornado passes over Tehran,' he wrote. 'Symbols of government are being bombed and destroyed — from the Broadcasting Authority and soon other target — and crowds of residents are fleeing. This is how dictatorships collapse.' Katz, speaking to senior military officials yestereday, said that Ayatollah Ali Khamenei could suffer the same end as Saddam Hussein of Iraq. Iran has arrested five suspected agents of Mossad, Israel's intelligence agency, on charges of 'tarnishing' the country's image, Iranian news agencies have reported. 'These mercenaries sought to sow fear among the public and tarnish the image of the sacred system of the Islamic Republic of Iran through their calculated activities online,' the Tasnim and ISNA news agencies said, quoting a statement from the Revolutionary Guards. The arrests were made in western Iran. Ayatollah Ali Khamenei, Iran's supreme leader, has made his first public comments since President Trump made a veiled threat on his life, saying that he was an 'easy target'. Khamenei wrote two messages on X. In Farsi, one said: 'In the name of the noble Haidar, the battle begins,' referring to Ali, considered by Shia Muslims to be the rightful successor to the prophet Mohammed. It was accompanied with an image of fireballs falling on what appeared to be an ancient city or castle. Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager. In a second post, in English, he wrote: 'We must give a strong response to the terrorist Zionist regime. We will show the Zionists no mercy.' Israel has launched a strike on Imam Hussein University in Tehran, which is affiliated with Iran's Islamic Revolutionary Guard Corps. Following the attack, smoke was seen rising from the area. Israeli authorities said that at least 24 people had been killed and hundreds injured in Iranian missile attacks. Iran said that at least 224 people had been killed and more than 1,000 wounded in Israeli attacks. More than 700 foreigners living in Iran have crossed into neighbouring Azerbaijan and Armenia since Israel launched its campaign on Friday, according to Tehran government figures. Among those fleeing were citizens of Russia, Belarus, Kazakhstan, Germany, Spain, Italy, and the United States. Israel is running low on defensive Arrow interceptors, which are designed to destroy ballistic missiles. The shortage introduces concerns about Israel's ability to counter long-range ballistic missiles from Iran in a drawn-out conflict. A US official told The Wall Street Journal that Washington had been aware of the capacity problems for months. Since the onset of the recent conflict, the Pentagon has sent additional missile-defence assets to the region, raising concerns about its supplies. 'Neither the US nor the Israelis can continue to sit and intercept missiles all day,' Tom Karako, director of the Missile Defense Project at the Center for Strategic and International Studies, a think tank, said. 'The Israelis and their friends need to move with all deliberate haste to do whatever needs to be done because we cannot afford to sit and play catch.' The first aircraft bringing home Israelis stranded abroad landed at Ben Gurion Airport on Wednesday. Flights had been cancelled and Israeli airspace closed because of the conflict. 'Just a short while ago, the first flight of Operation Safe Return landed at Ben Gurion Airport,' the airport's authority said in a statement. It added that the flight had been operated by the national carrier El Al and brought Israelis home from Larnaca in Cyprus. Israel's new bombing campaign against Iran began with strikes on nuclear facilities and military commanders on Friday and has continued with daily attacks on missile launchers, air-defence systems and even a state television channel. Iran has responded by firing salvoes of ballistic missiles at Israel, including some that have penetrated the Iron Dome missile-defence system, sending the population hurrying for shelter at the sound of air-raid alerts. • How the conflict unfolded The Israeli army said it had struck Iran's centrifuge-production and weapons-manufacturing sites in overnight strikes. 'More than 50 air force fighter jets, guided by precise intelligence from the intelligence directorate, completed a series of strikes on military targets in the Tehran area in recent hours,' the Israel Defence Forces (IDF) said. The army said a centrifuge-production site in Tehran used by Iran to expand the scope of its uranium enrichment was attacked. 'As part of the broad effort to disrupt Iran's nuclear weapons development programme, a centrifuge-production facility in Tehran was targeted.' In what it described as a 'wave of attacks', Israel struck several arms factories it claims were producing raw materials and components for assembling ground-to-ground missiles. 'Additionally, sites producing systems and components for ground-to-air missiles designed to target aircraft were attacked. These targets were struck as part of the IDF's effort to disrupt the Iranian regime's nuclear-weapons programme and its missile-production industry,' the IDF wrote on X. Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager. Israeli strikes have killed at least 585 people across Iran and wounded 1,326 others, according to a human rights group. The Human Rights Activists, based in Washington, said it had identified 239 of the dead as civilians and 126 as security personnel. Iran has not published regular death tolls during the conflict. Its last update, issued on Monday, put the death toll at 224 people killed and 1,277 wounded — however, the regime has minimised casualties in the past. Human Rights Activists provided detailed casualty figures during the 2022 protests over the death of Mahsa Amini, who was arrested for allegedly violating rules requiring women to wear the headscarf. The group cross-checks local reports in Iran against a network of sources it has developed in the country. The US embassy in Jerusalem said it will close until Friday. It directed government employees to shelter in place as the air war between Israel and Iran continued. In a statement posted to its website, the embassy said on Tuesday evening that the closure was 'a result of the current security situation and ongoing conflict between Israel and Iran'. It added: 'Given the security situation and in compliance with Israel Home Front Command guidance, the US embassy in Jerusalem will be closed tomorrow (Wednesday, June 18) through Friday (June 20).' Iran claims to have fired hypersonic missiles at the Israeli city in the latest round of overnight strikes. In retaliation for attacks on Tehran overnight Wednesday, Iran told residents of Tel Aviv to prepare for an attack, with the Islamic Revolutionary Guard Corps claiming its hypersonic Fattah-1 missiles were 'repeatedly shaking the shelters' in the city. 'The 11th wave of the proud Operation Honest Promise 3 using Fattah-1 missiles' was carried out, the Guards said in a statement broadcast on state television early Wednesday. Hypersonic missiles travel at more than five times the speed of sound and can manoeuvre mid-flight, making them harder to track and intercept. Iran also sent a 'swarm of drones' towards Israel, according to the army. Israeli warplanes targeted Tehran in a predawn raid on Wednesday as the air war entered its sixth day. The Israeli military issued a warning on social media for civilians in an area of the Iranian capital known as District 18, near the city's international airport, to evacuate. Iranian state media reported explosions ricocheting in the Piroozi, Sabalan and Sayyad areas of Tehran. Overnight, at least 60 Israeli air force jets carried out 'an extensive wave of strikes in the heart of Iran', targeting ballistic missile launchers that were aimed at Israel, according to the country's military. President Trump demanded an unconditional surrender from Iran and warned its supreme leader that he was an 'easy target' who would not be killed 'at least for now'. Increasing pressure on Ayatollah Ali Khamenei, while weighing up bombing raids on Iran's nuclear facilities, Trump said America's patience with the regime was running out. He aligned the US with Israel, boasting that 'we' have 'total control of the skies over Iran'. Trump posted: 'We know exactly where the so-called 'Supreme Leader' is hiding. He is an easy target, but is safe there — We are not going to take him out (kill!), at least not for now. But we don't want missiles shot at civilians, or American soldiers. Our patience is wearing thin.'
Reuters
3 hours ago
- Reuters
Former Iranian minister calls for Iranian control over Strait of Hormuz
DUBAI, June 18 (Reuters) - Former Iranian Economy Minister Ehsan Khandouzi has said that tankers and LNG cargoes should only transit the Strait of Hormuz with Iranian permission and this policy should be carried out from "tomorrow [Wednesday] for a hundred days." It was not immediately clear whether Khandouzi was echoing a plan under the Iranian establishment's consideration or sharing his personal opinion. Tehran has long used the threat of blocking the narrow waterway as a means to ward off Western pressure, without acting on its threats. The stakes have risen since Israel launched an air war on Iran last week after concluding the latter was on the verge of developing a nuclear weapon. Iran maintains its nuclear programme is purely for civilian purposes. "This policy [of controlling maritime transit in the Strait]is decisive if implemented on time. Any delay in carrying it out means prolonging war inside the country," Khandouzi posted on X on Tuesday. Iran's Oil Ministry and Foreign Ministry did not immediately respond to a request for comment. Khandouzi was economy minister until the summer of last year in the cabinet of late President Ebrahim Raisi and remains close to the Iranian establishment's hardliners. The Strait of Hormuz lies between Oman and Iran and is the primary export route for Gulf producers such as Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait. About 20% of the world's daily oil consumption — around 18 million barrels — passes through the Strait of Hormuz, which is only about 33 km (21 miles) wide at its narrowest point.
