Mid-East Stocks, US Futures Slide As Goldman Warns Of Paris Attacks' Negative Implications For Markets
Following the weakness in the few minutes of after-hours trading on Friday's US session that overlapped with the first headlines from France, we are getting a first glimpse at the posible fallout from the Paris terror attacks. The Middle Eastern stock markets tumbled significantly with Saudi Arabia's Tadawul All Share index down 3% (biggest drop in 3 months) to its lowest since December 2012, and Dubai's FMG Index plunged 3.7% to its lowest since 2014. Short-run implication for the equity market is likely to be negative according to Goldman, with a notably higher risk premium regarding uncertainties about the medium-term political implications.
Friday's after-hours action in US equity futures was weak - and this was hours before the worst headlines hit:
And Middle Eastern markets are giving us a glimpse of what is to come...
To 3 year lows...
Near 2-year lows...
As Goldman Sachs warns, Attacks in Paris: Increased uncertainty likely to weigh on activity and increase market volatility in the short run
French President Francois Hollande has declared a 'state of emergency' following six simultaneous terrorist attacks in Paris on Friday night (November 13, 2015), for which the Islamist State (IS) organisation has claimed responsibility.
The 'state of emergency' entails the imposition of the following measures until further notice:
Political reactions –On Saturday morning, President Hollande declared three national ‘days of mourning’ for the victims of the terrorist attacks, insisting on the need for national unity and solidarity. His immediate response reflects the French authorities’ fear of growing division and tension within the French population, which Friday’s events are only likely to intensify. President Hollande also expressed France’s determination to continue to fight terrorism both inside and outside its borders....MORE
- Reinforced controls at French borders and for all transport to and from other countries.
- A reinforced military presence in Paris, with the possibility that curfews may be introduced.
- Public events (sport, cultural and entertainment) may be cancelled when public security is believed to be at risk.
- Additional security and police controls (including the ability to conduct home searches at any time without warning).
- Political tensions intensifying, leading to heightened political uncertainty