DUBAI: Most stock markets in the Gulf ended higher on Monday amid rising oil prices, as investors anxiously waited to see if Iran would retaliate against US attacks on its nuclear sites.
Oil prices touched a five-month high before paring gains on Monday as oil and gas transit continued on tankers from the Middle East after US airstrikes against Iran at the weekend.
Market participants expect further price gains amid mounting fears that an Iranian retaliation may include closing the Strait of Hormuz, through which roughly a fifth of global crude supply flows.
Saudi Arabia’s benchmark index advanced 1.3%, buoyed by a 1.6% rise in Al Rajhi Bank and 1.5% increase in the country’s biggest lender Saudi National Bank.
Investors downplayed the potential for further escalation in the regional military conflict. This sentiment follows the possibility of peace talks, though the probability of such discussions remains low. This upward movement could be temporary, as volatility and uncertainty persist, said Hani Abuagla Senior Market Analyst at XTB MENA.
“The situation could worsen if Iran closes the Strait of Hormuz, which would disrupt oil supplies and potentially lead to further military escalation.”
Dubai’s main share index climbed 1.1%, led by a 2.8% rise in blue-chip developer Emaar Properties and a 1.8% increase in Sharia-compliant lender Dubai Islamic Bank.
According to Abuagla, improved investor risk appetite returned to support the Dubai market. The focus has shifted back to the healthy economic fundamentals, which could foster further recovery if this trend continues.
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