Two days after a Surprise attack of the fundamentalist group Hamas left more than 1,000 dead and pressured the Israeli cabinet to formally declare a state of war, many major airlines have canceled all flights to Israel amid a retaliatory military response and stocks/could-war-in-the-middle-east-help-rtx-and-lockheed-martin-put-in-lows–16135018″>rising explosions in different border areas.
While Israeli-owned El Al (ELAF) – Get a free report continues to operate flights in and out of Israel, US-based Delta Air Lines. (give it) – Get a free reportUnited (UAL) – Get a free report and American airlines (AAL) – Get a free report as well as British Airways, Air France (AFRAF) – Get a free report and low-cost airlines such as EasyJet (EJTTF) – Get a free report They have canceled all flights to Tel Aviv “until further notice.”
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The large-scale nature of the action, in turn, has caused shares of many airlines to fall rapidly. On Monday afternoon, Delta shares fell more than 5% to $35, while United shares fell 5.56% to $39.50.
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Delta, United and American shares are down amid service suspension
American Airlines shares also fell by a similar percentage to $12.11, while Air France shares fell more than 6% to $1.22. International Group of Consolidated Airlines (BABWF) – Get a free reportwhich is the parent company behind British Airways, Aer Lingus, Iberia and Vueling, also saw its shares fall almost 6% to $3.57.
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On its website, Delta currently says that its service to israel may be affected until October 14. The stock drop represents an immediate response to airline cancellations that analysts say are likely to recover once service resumes, given that flights to Israel are a small portion of the overall market share. of these airlines. .
“If the war remains confined between Israel and the Palestinians, markets will likely forget about it after a few days,” Raffi Boyadjian, senior investment analyst at XM, wrote in a note to investors.
While post-pandemic travel rates are currently high, airline stocks are generally down this year as airlines struggle to find staff to meet this demand.
However, the shares of these companies simply soared.
At the other extreme, stocks of weapons manufacturers like Lockheed Martin. (LTM) – Get a free report it soared more than 8% on Monday afternoon. Northrop Grumman (WITH) – Get a free reporta major producer of rockets and other defense weapons, saw its shares rise by more than 10%, while missile producer RTX (RTX) – Get a free reportShares are up 4.73%.
After faltering in recent months, oil prices soared again nearly 5% to $86 a barrel amid concerns that prolonged fighting could hit Middle East production. Investment group Citadel also sent a note warning its investors that “any extension of the battles will have potential repercussions on oil markets.”
“Developments in this region are now directly impacting financial markets around the world, which, as always in times of increased volatility, is immediately prompting some investors to sell riskier parts of their portfolios, such as stocks and some currencies. “Nigel Green, who runs London-based financial advisory firm deVere Group, said in a statement to investors. “Oil has a disproportionate impact on global financial markets due to its fundamental role in the global economy, its interconnectedness with various sectors and its potential to influence broader economic conditions and investor sentiment.”
