According to early reports, equities across most Arab markets moved higher on Sunday as the risk of a military showdown between the U.S. and Russia in Syria subsided.
Bloomberg is reported that Saudi Arabia’s Tadawul index led the advance as all but one stock rose, and Dubai’s benchmark index climbed the most since June. Shares in Abu Dhabi gained as much as 1.3 percent, sending the main market gauge to its highest level on a closing basis since August 2015.
To recap this week-end’s events, early Saturday (local time), the U.S., U.K. and France attacked, targeting military positions and research weapons lined to chemical weapons in Syria.
Russia, Iran and Lebanon’s Hezbollah group condemned the action while rallying around the Syrian Assad regime. Also of note, they did not threaten retaliation. In the meantime, Saudi Arabia said it would take part in the U.S. coalition if asked. Additionally, the U.S. said it remained “locked and loaded” if there were further chemical attacks on civilians or a retaliation.
We could see a relative calm in the U.S. stock market early Monday although volatility will remain at elevated levels because many professional investors consider the aggressive action by the U.S.-led coalition to be a one-time event and it doesn’t involve any boots on the ground.
If the action over the week-end doesn’t lead to a sell-off in Asia, Europe or the U.S. then this will likely mean that investors are focusing on company results that will be released throughout the week.
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