Dubai’s Index Crashes By Over 7% As The Drums Of War Begin To Beat…
The escalation of the crisis in Syria encouraged investors to sell off stocks in Gulf markets and cash in on many of the significant profits already registered so far this year. The ramifications of the intense speculation were not isolated to one geographical market location.
The Dubai Financial Market (DFM) plummeted 7.01 percent to 2549.61 on Tuesday; the biggest one-day collapse since the November 2009 debt crisis. Saudi Arabia’s Tadawul All Share Index lost over 4 percent, the largest market drop since August 2011. In Kuwait, stocks plunged by over 6 percent.
The DFM had risen by more 60 percent since January, making it one of the most profitable markets globally in 2013, while the Tadawul had climbed over 16 percent during the past year, so the sympathy for the losses experienced on Tuesday will naturally be muted.
However, it wasn’t just the Gulf markets that experienced pain for investors due to the crisis escalating; the USA main indices sold off, as did the majority of European markets. And the closer to the inevitable ‘action’, or “theatre” (as those who dictate the movements from the comfort of their offices like to refer to combat as), the worse the sell off. The Istanbul Stock Exchange recorded a massive 4.73% sell off, the worst in European markets on Tuesday, as the lira reached its lowest historical worth versus the U.S. dollar.
Overall, investors can expect further losses as the rhetoric builds up and once the inevitable incursions and military strikes take place investors can expect to witness oil spike severely, perhaps precious metals will return as a safe haven, whilst the currencies and markets further from the Middle East will potentially prosper.
But all things considered discussing profits and or losses, when we could be on the eve of more ‘shock and awe’ USA style seems tasteless, inappropriate and highly insensitive.