Markets: Political Risk Escalates in Morocco Following a New Night of Violence

After the night of September 30, which saw 263 law enforcement officers injured, 23 civilians affected, and 409 arrests, along with attacks on bank branches and vehicles in Aït Amira and Inzegane, the situation worsened on October 1. Two individuals were killed in Lqliaa during a shootout that occurred during an attempted robbery of service weapons from members of the Royal Gendarmerie. This incident heightens the risk of a shift towards a more critical and dangerous phase of unrest. The protests remain largely coordinated through social media platforms such as TikTok, Discord, and Instagram, lacking formal leadership, which adds to their unpredictability. The social crisis is increasing volatility in investment expectations, domestic consumption, and overall confidence. Foreign investors may adopt a more cautious approach. The challenge for authorities will be to maintain stability while providing concrete responses to social demands, a delicate balance to achieve. In the stock market, brokers are noticing rising anxiety among retail investors, particularly among the wave of first-time investors who entered the market during the summer of 2025. Mutual funds, already facing underliquidity since September due to numerous block trades, have limited capacity to cushion the decline. Conversely, institutional investors are taking advantage of this panic phase to reposition themselves at attractive levels, despite a favorable news flow at the end of September regarding both macroeconomic and microeconomic conditions, supported by solid earnings reports and reassuring statements from executives confirming their annual targets. From a technical perspective, the inability of the MASI index to confirm the rebound that began on Wednesday during the second half of the session reinforces bearish pressure. The key support level to watch is now around 17,800 points.