Tel Aviv share indexes edge lower after Iran attack on Israel

Tel Aviv shares were flat to marginally lower in early Sunday trade after Iran’s attack on Israel on Saturday.

At 0734 GMT, the broad Tel Aviv 125 index was down 0.2%, coming off an earlier drop of 0.6%, while the blue-chip TA-35 was unchanged. Government bond prices were down as much as 0.6%.

Iran launched some 300 explosive drones and fired missiles at Israel late on Saturday - its first direct attack on Israeli territory in a retaliatory strike that raises the threat of wider regional conflict.

China is “deeply concerned” about escalating tensions in the Middle East after Iran launched drones and missiles in a retaliatory strike against Israel, a foreign ministry spokesperson said on Sunday.

The drop on Friday erased weekly gains for the NSE Nifty 50 and S&P BSE Sensex indexes. Hotter-than-expected U.S. inflation data on Wednesday threw cold water on rate-cut hopes, triggering a drop in Indian equities on Friday.

“The inflation data has definitely spurred worries over the timing of the Fed rate cut in 2024,” said Narendra Solanki, head of fundamental research of investment services at Anand Rathi Shares and Stock Brokers.

Meanwhile, a treaty between India and Mauritius is not likely to have retrospective taxation effect as tax will be imposed only after the date of the signing of the agreement between the two, news channel CNBC-TV18 reported, citing sources.

Reliance, auto stocks boost India’s Nifty, Sensex to record highs This may have also weighed on domestic equities on Friday, Deven Choksey, managing director of DRChoksey FinServ, said.

Metal stocks rose 2.90% and were the top weekly sectoral gainer by percentage.

Pharma stocks fell 1.94% this week, hurt by a 4.29% drop in Sun Pharma following an order by the U.S. drug regulator related to the company’s Dadra facility.

On the day, the Nifty 50 fell 1.03% to 22,519.40, while the S&P BSE Sensex shed 1.06% to 74,244.90.

India’s top IT services provider Tata Consultancy Services rose 0.42% ahead of its quarterly results. The company reported fourthquarter revenue that missed estimates, moments after the closing bell.

Focus will shift to India’s consumer price inflation data for March. The numbers are expected later in the day.

India’s consumer price inflation likely eased to a five-month low of 4.91% in March, according to economists polled by Reuters.

Iran’s strikes marked its first direct attack on Israeli territory, raising the threat of a wider conflict in the region where China has sought to play a role as a mediator and from where it sources a growing proportion of its energy imports.

“China calls on relevant parties to remain calm and exercise restraint to avoid further escalation of tensions,” the spokesperson said in a statement in the form of a response to a question from unidentified reporters about the Iranian attacks.

“China calls on the international community, especially influential countries, to play a constructive role in maintaining regional peace and stability,” the spokesperson, who was also not identified, said in the statement.

The war between Israel and Hamas in the Gaza Strip, now in its seventh month, has ratcheted up regional tensions, spreading to fronts with Lebanon and Syria and drawing long-range fire from Yemen, and Iraq at Israeli targets.

The Chinese foreign ministry’s spokesperson said that this round of tensions was a “spillover from the Gaza conflict,” adding that quelling it as soon as possible was “a top priority”.

China mediated between Iran and Saudi Arabia last year, and Reuters reported China had asked Iran to help rein in attacks on ships in the Red Sea by the Iran-backed Houthis, or risk harming business relations with Beijing.

Earlier on Sunday, the Chinese embassy in Iran advised Chinese nationals and companies in the country to strengthen security precautions, according to state television CCTV.

China Southern Airlines has cancelled a flight to Iran for Sunday and Hainan Airlines is saying they are monitoring the situation closely and is evaluating whether an upcoming flight to Israel can fly normally, according to Chinese business outlet Yicai.