DOHA/CAIRO (Reuters) -Middle Eastern stock markets tumbled on Sunday as escalating violence in Israel and Lebanon hit investor sentiment in the region.
Egypt’s stock market suspended trading after the benchmark index plummeted 9.5 percent early in the session while Qatar’s main index closed 6.08 percent down.
Most bourses in the Gulf Arab region traded lower on Sunday. Saudi Arabia’s market, the Arab world’s largest, rebounded after plummeting more than 9 percent on Saturday.
The fall in Qatar’s index was its biggest in at least two years, according to Reuters data.
“This follows what happened yesterday in Gulf markets over all the concern about what is happening in the Middle East,” said Samer Al Jaouni of Ahli Bank in Qatar.
Israel launched an assault on Lebanon five days ago after Lebanese Hizbollah guerrillas, backed by Iran and Syria, captured two Israeli soldiers and killed eight.
Hizbollah rocket attacks killed eight people in the Israeli city of Haifa on Sunday. Israel’s assault has killed 107 people in Lebanon, a country that has drawn billions of dollars in Gulf Arab investment over the past few years.
The crisis has spooked investors in the world’s biggest oil exporting region, where stock markets posted some of their biggest losses since a region-wide crash earlier this year.
“These declines are due to the Lebanese situation and to fears that this could spread throughout the region and involve Iran. But markets could stabilize if the conflict doesn’t spread,” said Joe Kawkabani of Shuaa Capital in Dubai.
“Second quarter results have been strong and the Qatari economy is doing well, but if Iran and Syria get involved in this conflict, the fear is that missiles could fly over the Gulf and that is worrying investors. Everyone is playing it safe right now,” he said.