Caution May Return On Ukraine-Russia Crisis, Egypt Clashes Could Weigh

Caution may return to the Middle East markets on Sunday as a standoff between occupying Russian forces and besieged Ukrainian troops intensifies.

Shots were fired in Crimea as Russian forces become increasingly aggressive towards Ukrainian troops, who are trapped in bases and have offered no resistance since Russia’s seizure of the Black Sea peninsula more than a week ago.

Regional shares were dampened last week due to the Ukrainian crisis but recovered lost ground as the situation seemed to have calmed. Renewed tension could trigger profit-taking.

In Egypt, three protesters were killed and dozens wounded as Muslim Brotherhood supporters and police clashed across the country on Friday, the health ministry and security sources said.

Cairo’s benchmark index has risen 17.2 percent year-to-date, mostly on optimism the country is moving towards presidential election in coming months with a popular backing for army chief Field Marshall Abdel Fattah al-Sisi if he runs for presidency.

The fresh violence could weigh on sentiment but as long as the country follows its roadmap to restore full civilian rule, any losses are likely to be capped.

Saudi Arabia, which hailed al-Sisi’s overthrow of Mohamed Mursi, designated the Muslim Brotherhood a terrorist group on Friday, a move that an Egyptian government spokesman said Cairo welcomed.