World Shares Are Mixed as Tensions Escalate in Middle East

FILE PHOTO: A 3D-printed oil pump jack is placed on dollar banknotes in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: A 3D-printed oil pump jack is placed on dollar banknotes in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo
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World Shares Are Mixed as Tensions Escalate in Middle East

FILE PHOTO: A 3D-printed oil pump jack is placed on dollar banknotes in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: A 3D-printed oil pump jack is placed on dollar banknotes in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

World shares were mixed on Wednesday, with European benchmarks mostly higher. Hong Kong’s Hang Seng soared more than 6% while other Asian markets retreated as tensions escalated in the Middle East, The Associated Press reported.
Oil prices extended gains after Iran fired dozens of missiles into Israel, potentially raising the risk of disruptions to supplies. That news overshadowed an upbeat report showing US job openings rose unexpectedly in August as the American labor market continued to show resilience.

A debate Tuesday night between vice presidential candidates Democratic Gov. of Minnesota Tim Walz and Republican senator JD Vance likewise drew scant market attention, analysts said.
“The market’s muted reaction says it all — traders are far more focused on pressing economic concerns and geopolitical risks than on the vice presidential showdown,” Stephen Innes of SPI Asset Management said in a commentary.

Germany's DAX edged 0.1% higher to 19,232.74 and the FTSE 100 in London advanced 0.4% to 8,311.82. In Paris, the CAC 40 picked up 0.5% to 7,611.12.

The future for the S&P 500 was 0.1% lower while that for the Dow Jones Industrial Average gave up 0.2%.

Tokyo's Nikkei 225 lost 2.2% to 37,808.76. It has retreated since the ruling Liberal Democratic Party chose Shigeru Ishiba to lead the government, replacing Fumio Kishida, who stepped aside on Tuesday. Higher energy prices in Japan, which relies heavily on imported oil, gas and coal to power its industries, would add to Ishiba's burdens as he works to pep up the economy.

Hong Kong's Hang Seng roared 6.2% higher to 22,443.73, riding a wave of investor enthusiasm over recent moves by Beijing to rev up the Chinese economy with policies aimed at reviving the ailing property sector and supporting financial markets.

With Shanghai and other markets in China closed, trading crowded into Hong Kong. Hong Kong-traded shares in China Vanke, one of many real estate developers squeezed by a crackdown on borrowing that pushed the industry into a slump, jumped 10%. Longfor Holdings Group rocketed nearly 25% and appliance maker Midea surged 4.2%.

The Hong Kong benchmark is trading at its highest level since early 2023.

Australia's S&P/ASX 200 edged 0.1% lower to 8,198.20 and the Kospi in Seoul lost 1.2% to 2,561.69.

On Tuesday, US stocks retreated from their records, with the S&P 500 dropping 0.9%. The Dow dropped 0.4% and the Nasdaq composite lost 1.5%.
Israel is not a major producer of oil, but Iran is, and the potential for a wider conflict could affect other, neighboring producers of crude. The price for a barrel of benchmark US crude rose as much as 5% on Tuesday before settling 2.4% higher. Brent crude, the international standard, rallied 2.6%.
Early Wednesday, US crude was up $1.51 at $71.34 per barrel. Brent crude climbed $1.45 to $75.01 per barrel.
The all-time high that the S&P 500 set on Monday was its 43rd of the year so far. Stocks had been jumping on hopes the US economy can continue to grow despite a slowdown in the job market, as the Federal Reserve cuts interest rates to give it more juice. The Fed last month lowered its main interest rate for the first time in more than four years, and it’s indicated it will deliver more cuts through next year.
The dominant question hanging over Wall Street is whether the cuts will ultimately prove to be too little, too late after the Fed earlier kept rates at a two-decade high in hopes of braking on the economy enough to stamp out high inflation.
A discouraging report arrived Tuesday, showing US manufacturing weakened by more in September than economists expected.
Another threat to the economy could lie in a strike by dockworkers at 36 ports across the eastern United States that could snarl supply chains and drive up inflation.
The workers are asking for a labor contract that doesn’t allow automation to take their jobs, among other things. Supply chain experts say consumers won’t see an immediate impact because most retailers have stocked up on goods, moving ahead shipments of holiday gift items.



IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.


Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.


Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.