(Paris) World stock markets posted declines on Monday, worried by the rise in oil prices, after the surprise offensive by the Palestinian Islamist movement Hamas against Israel.
In Europe, Paris fell by 0.55%, Frankfurt lost 0.67%, Milan lost 0.46% and London finished almost stable at -0.03%, helped by a jump in its oil values.
In Israel, the main TA-35 index of the Tel Aviv Stock Exchange rebounded by 0.95%, after falling by 6.47% on Sunday, its worst session since March 2020.
After opening lower, Wall Street indices were mixed. Around 12:45 p.m., the NASDAQ dropped 0.42%, the S&P 500 fell slightly by 0.15% and the Dow Jones by 0.09%.
Since the Hamas attack began on Saturday, more than 700 Israelis have been killed and 2,150 injured, according to the army. On the Palestinian side, 560 people were killed and 2,900 injured, according to local authorities.
Hamas’ surprise attack has fueled fears of renewed instability in the Middle East, which could in turn disrupt oil flows at a time when the market is already extremely tight and prices are high.
Craig Erlam, Oanda analyst
Around 12:45 p.m., the price of a barrel of Brent from the North Sea for delivery in December gained 3.57% to 87.60 dollars and a barrel of American WTI, with delivery in November, 3.91% to 86.05 dollars.
“The market reaction is really measured,” explains Nicolas Budin, head of equity management in Europe at Myria AM. For him, the impact on oil prices is also measured because last week’s drop was “not entirely justified” and was therefore “erased”.
This rebound in prices fuels fears that inflation will rise again, which would have consequences for the global economy, starting with a possible maintenance of interest rates at high levels.
“Not only economic risks, but also geopolitical risks should remain a factor of uncertainty in the coming days,” comments Timo Emden of Emden Research.
In terms of currencies, the dollar, a safe haven, gained 0.46% against the euro, to 1.0538 dollars per euro. The shekel, the Israeli currency, fell by 2.67% against the dollar, to 3.95 shekels per dollar.
On the bond market, interest rates on European sovereign debts fell. That of the 10-year German government bond ended at 2.77% compared to 2.88% at Friday’s close. The American bond market was closed.
The gap between the German 10-year rate and the Italian equivalent ended at 2.06 percentage points on Monday, the highest since January, after peaking at 2.11 shortly after the opening, amid fears of investors on the sustainability of Italian debt and the upward revision of public deficits by Rome.
Bitcoin fell 2.18% to $27,310, cryptocurrencies being sensitive “to the geopolitical context”, according to analysts at Riches Flores Research.
Oil and defense on the rise
Defense sector stocks and oil companies were in demand on Monday, in the wake of the war between Israel and Hamas.
In Paris, Thales gained 4.69% and Dassault Aviation 4.38%. Leonardo gained 4.79% in Milan, the German manufacturer of tanks and armored vehicles Rheinmetall advanced 7.14% in Frankfurt, BAE Systems gained 4.53% in London. In New York, Lockheed Martin climbed 7.95%.
As for oil stocks, Shell gained 2.61% and BP 2.91% in London. TotalEnergies advanced 1.74% in Paris, Eni 2.27% in Milan, ExxonMobil rose 3.23% and Chevron 2.71% in New York.
Tourism hit
Groups linked to the tourism industry suffered from the conflict, first and foremost the airlines, which suspended their connections to Israel this weekend. American Airlines (-4.51%), United Airlines (-5.11%) and Delta Air Lines (-4.62%) declined in New York.
In Paris, Air France-KLM lost 8.48%, Lufthansa 4.28% in Frankfurt, IAG 6.14% in London.
By extension, the cruise line Carnival (-4.90%), the tour operator TUI (-5.92%), the hotelier Accor (-2.87%) were also struggling.