Global markets brace for fallout from Israeli-Hamas conflict

Though market reaction has been relatively muted, Israel’s currency took a big hit and the conflict has the potential to drive up oil prices further and deal a fresh blow to the world economy

Oil prices rose nearly 6% as investors priced in the possibility of conflict spreading. Picture: Ariel Schalit/AP

The Israeli-Hamas attacks have sharpened focus on rising geopolitical risks for financial markets, as investors wait to see if the conflict draws in other countries, with the potential to drive up oil prices further and deal a fresh blow to the world economy.

Israel’s prime minister Benjamin Netanyahu has vowed to “demolish Hamas” as the military prepared for potential ground operations in Gaza against the militant group, following its deadly attacks a week ago in Israeli border towns.