Markets in the Middle East declined on June 12, due to fears of a new escalation of relations in the region. Stocks in Tel Aviv and Dubai fell more than 2%: Thursday could be their worst day in two months. The U.S. ordered some staff to leave the embassy in Iraq over fears of Iranian strikes. And CBS sources say Israel has warned U.S. officials to prepare for its operation against Iran.

Details

- The index of Israeli stocks on the Tel Aviv exchange TA-35 dropped by 2.5 percent - to 2,668.58 points at the moment. The index showed the worst performance of the day in the world. At the time of publication of this text, the index was down 1.9%.

- The Dubai Securities Index Dubai Financial Market General Index lost 2.7 percent in trading - reaching a low of 3,443.54 points, but then slowed slightly in the decline.

- In Saudi Arabia, the Saudi Tadawul All Share Index was down 1.8% at the moment from Wednesday's close.

For the TA-35 and a Dubai-based stock index, Thursday's drop could be the worst in two months, noted Bloomberg.

What's going on

Investors are reacting to increased tensions in the Middle East, Bloomberg writes. The U.S. ordered some personnel to leave the embassy in Baghdad and also allowed the families of military personnel to leave the Middle East, Bloomberg writes. CBS News, citing sources reported that U.S. officials had received information that Israel was ready to launch its operation against Iran. The U.S. expects Iran may retaliate by striking U.S. facilities in Iraq, according to CBS News.

The IAEA accused Iran of violating its commitment not to enrich uranium for the first time in nearly 20 years. Iran responded by saying it would launch new infrastructure to enrich uranium: deepening the crisis in Tehran's relations with the U.S. and Israel, wrote Bloomberg. Iran made the decision ahead of a sixth round of talks between delegations from Washington and Tehran due to take place on Sunday, noted The Wall Street Journal. U.S. President Donald Trump earlier this week stated that he is now «much less certain that a deal will be made.»

Growing geopolitical tensions led to a jump in oil prices on June 11. On Thursday, however, quotes were down more than 1.5%: the cost of Brent futures, which earlier in the day exceeded $70 per barrel, fell below $68.4, according to data from the Intercontinental Exchange.

Near-term traders could be spooked by reports that the U.S. is «withdrawing non-critical diplomatic personnel» as it could be a signal that talks with Iran over its nuclear program are nearing an inconclusive end, Hasnain Malik, head of equity strategy research at Tellimer, told Bloomberg. He himself is not inclined to exaggerate the risks: he says that «there have been many instances of heightened geopolitical tensions before,» the agency writes. 

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