Gulf bourses gain on signs of de-escalation between US and Iran

DUBAI: Most stock markets in the Gulf closed higher on Monday after US President Donald Trump said Iran was “seriously talking” with Washington, a comment that signaled potential de-escalation in tensions.

Iran is reviewing details of several diplomatic channels aimed at easing tensions with the United States, Foreign Ministry spokesperson Esmaeil Baghaei said on Monday, adding that Tehran hoped for progress in the coming days.

Against the backdrop of a US Navy buildup near Iran, Trump told reporters last week that Iran was “seriously talking” with Washington. His remarks came just hours after Iran’s top security official, Ali Larijani, wrote on X that preparations for talks were in progress.

Saudi Arabia’s benchmark stock index rebounded 1.4 percent, a day after falling the most in nearly 10 months - with shares in Al Rajhi Bank gaining 1.4 percent.

Oil behemoth Saudi Aramco was up 1.7 percent.

Even though the market is still trending higher, oil-related risks have returned. Today’s drop in crude prices may dampen sentiment in Saudi Arabia and across the broader region, said Joseph Dahrieh, managing director at Tickmill.

Dubai’s main share index advanced 2.1 percent, buoyed by a 6.1 percent jump in top lender Emirates NBD after HSBC raised the lender’s target price to 36.1 dirham, up from 33 dirhams.

Improved sentiment has shifted investor attention back to earnings season and the strong economic backdrop that continues to underpin the rally, said Dahrieh. Dubai’s market posted broad-based advances, led by real estate stocks, wiping out the recent pullback.

In Abu Dhabi, the index added 0.6 percent. Iran’s leadership warned of a regional conflict on Sunday if the US were to attack it and it designated European Union armies as “terrorist groups” in a retaliatory move after the EU designated the country’s Revolutionary Guards as a terrorist organisation.

The Qatari index gained 0.6 percent, with Qatar National Bank - the Gulf’s biggest lender by assets - rising 0.7 percent.