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Airline operators, hotel groups and holiday companies are likely to face sharp declines in their share prices as travel to the region remains effectively shut down. The Middle East accounts for roughly 18% of global air freight, so disruptions to cargo routes could also create fresh supply-chain pressures. By contrast, defense stocks are expected to rally strongly. Although futures indicate that the FTSE 100 will open lower, the UK benchmark could outperform peers, supported by its heavy weighting in defense contractors and oil majors.
Newsflow to steer market direction
Donald Trump has suggested that the attacks could continue for the next month, though the strategic objectives remain unclear. Reports indicate that the killing of Iran’s Supreme Leader has not toppled the regime, with a temporary ruling council in Tehran vowing retaliation. Against this backdrop, markets remain highly sensitive to headlines, and shifting newsflow could quickly alter sentiment. Volatility is likely to stay elevated at the start of the week, making headline risk a key factor for traders.
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