In the latest disturbing development in the ongoing Middle East conflict, Israel carried out a devastating airstrike on a hospital in Gaza on October 17, resulting in a tragic loss of around 500 Palestinian lives, as reported by Palestine’s health ministry.
The repercussions of this attack were swiftly felt in financial markets, particularly impacting the airline sector.
Notably, on October 18, the stock prices of airlines in the United States and Europe witnessed significant declines, reflecting the far-reaching consequences of the escalating conflict on global economic stability.
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United Airlines (NASDAQ: UAL) felt the strongest impact, with its shares sliding more than 5% in premarket trading.
The US carrier halted its flights to Tel Aviv due to the ongoing war and issued a warning that the conflict and rising jet costs would impact its profits in the last quarter of the year.
As a result, United updated its Q4 profit outlook, which is now below analysts’ estimates. The company expects an adjusted profit in the range of $1.50 to $1.80 per share in the fourth quarter if flights to Israel remain grounded through October 31.
Analysts were estimating a $2.06 per share profit.
European airlines tumble in Wednesday session
United was not the only major carrier that felt the impact of the growing geopolitical tensions.
Shares of Delta Airlines (NYSE: DAL) slipped 1.5% in the market pre-open on Wednesday, while American Airlines (NASDAQ: AAL) declined over 1.8%.
Elsewhere, European carriers were also affected, with Lufthansa’s (ETR: LHA) stock dropping around 3.8% in the Wednesday session, and Air France losing about 4.1%.
EasyJet (LON: EZJ) dropped 3.75% in London, while the International Consolidated Airlns (LON: IAG) fell more than 2%.
Safe-haven assets rise
Meanwhile, the value of safe havens edged higher on Wednesday following the blast on the hospital in Gaza.
Notably, oil prices jumped over 2.5%, with the benchmark Brent crude climbing to $92.20 per barrel and the West Texas Intermediate (WTI) advancing to $89.11.
Spot gold also moved higher, with the bullion currently costing $1,944 per ounce, while copper futures rose about 1% to $3.61.
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