Gulf markets are falling after Iran attacked Israel, putting global traders on edge. By Reuters

Federico Maccioni and Alun John

DUBAI/LONDON (Reuters) – Gulf markets fell slightly on Sunday, an early sign of investor reaction to Iran’s unprecedented attack on Israeli territory as trading prepares to resume in most markets on Monday, with investors paying particular attention to oil. It was.

Activity may be choppy as traders digest last week’s global macroeconomic data, most importantly higher-than-expected US inflation.

Saudi Arabia’s benchmark stock index closed 0.3% lower, rebounding from an earlier large decline, while the main Qatar index fell 0.8%.

Shares in the Tel Aviv Composite Index rose 0.3%.

Iran fired explosive drones and missiles at Israel on Saturday in retaliation for Israel’s suspected attack on its consulate in Syria, and on Sunday warned Israel and the United States of a “much bigger response” if there was retaliation.

“The campaign is not over yet,” Israel said.

“The question is whether Israel will try to escalate the conflict,” said Tina Fordham, a geopolitical strategist at Fordham Global Foresight in London. “I expect oil prices to rise on Monday.”

Oil prices had already been supported last week by concerns about Iran’s response, with the global benchmark hitting $92.18 a barrel on Friday, the highest since October.

Some haven assets also rose on Friday as traders were wary of exposing themselves to weekend conditions as markets closed. The benchmark, which moves inversely to prices, fell nearly 8 basis points, its biggest one-day loss in a month. (Us/)

Meanwhile, gold prices rose above $2,400 an ounce, the latest in a series of highs. (goal/)

one of the few assets traded around the clock, fell 8% in about 20 minutes to below $62,000 at approximately 2000 GMT on Saturday after reports of an attack in progress emerged.

It has since regained some ground and was last traded at around $64,500.

vulnerable environment

But geopolitics won’t be the only thing on investors’ minds Monday.

“The news flow is about Iran and Israel, so that will be most of what people will be discussing on Monday. However, we are in an environment where we have not yet digested the US inflation news and what it means for the country. The Federal Reserve,” Samy Chaar, chief economist in Geneva at Lombard Odier, said on Sunday.

“We experienced geopolitical stress this weekend in the aftermath of the CPI report. “It’s a fragile market environment in the short term, but after a fantastic period, it’s natural that there’s going to be some vulnerability.”

MSCI’s Global Stock Index has been particularly optimistic following resilient economic data from the United States and expectations that major central banks will cut interest rates after the Iran-backed Hamas attacked Israel on October 7 and Israel responded by invading the Gaza Strip. Thanks to this, we reached a new record high.

Saudi Arabia’s main index rose about 20% compared to October 8. The Qatar benchmark index is trading at similar levels to October 8.

Because geopolitics can be one of the more unpredictable factors, some international investors are focusing on broader economic conditions.

“I’m not going to armchair and pretend to have a head start on how things will play out,” said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore.

“The most important news for the market last week was the reaccelerating trend in consumer price inflation and its implications for the future path of short-term interest rates.”