Saturday witnessed the birth of a new war as Hamas forces launched attacks from Gaza on IDF checkpoints and settlements in southern Israel. The latter declared war and retaliated by putting Gaza under siege alongside frequent airstrikes, which impacted various stock movements.
Impact of Israel-Hamas conflict on global stock movements
The global financial sphere kept a close eye on stocks to identify and track the specific geopolitical risks as relevant markets opened on Monday. Analysts predicted a rise in the buying of assets such as gold and US currency, followed by an increased demand for US Treasuries.
In line with these predictions, US stock futures went onto the back foot while crude oil, gold, and Treasuries gained. Defence shares are also soaring, with companies such as Lockheed Martin (LMT) and Northrop Grumman (NOC) clocking rises of 4.9% and 4.3% during premarket trading.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
Other organisations in the defence business also experienced similar share boosts. These include General Dynamics (GD), L3Harris Technologies (LHX), and Huntington Ingalls Industries ((HII). UK arms manufacturer BAE Systems (BAESY) was named as a FTSE 100 top performer on the London Stock Exchange.
Notable throughout Europe, this trend also included Saab (SAAB-B.ST), a manufacturer of jet fighters and vehicles that gained 9%, and German-based Rheinmetall (RHM.DE), a weapons manufacturer that gained 5.5%.
However, airline stocks plunged as most operators cancelled flights to Israel. Experts believe this conflict will have far-reaching market impacts and this is just the tip of the iceberg.
Investors seek direction, but few analysts have expressed clear guidance to date. Everything depends on the length of the conflict, as speedy resolution may see defence stocks lose some of these gains.
