Most Gulf markets fall as regional risks escalate; Saudi flat on supply-reassurance reports

BENGALURU: Most Gulf markets fell on Wednesday as escalating regional risks kept investors cautious, while Saudi Arabia’s bourse was flat as reports of additional crude cargoes via Oman eased fears of wider Middle East supply disruptions.

Saudi warplanes struck Yemen, while Houthis launched drones and missiles at Saudi cities, the Iran-backed group said on Wednesday, following a swift advance that has expanded Tehran’s influence in the wider Middle East conflict.

Riyadh said it downed a Houthi drone south of Mecca before it entered restricted airspace, calling the incident a “red line.” The Houthis denied targeting the holy city, dismissing the claim as propaganda.

Saudi Arabia’s benchmark index finished flat, with oil major Saudi Aramco gaining 0.6%.

The kingdom is offering additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman’s Sohar port, after drone attacks damaged a key pipeline linking its oil fields to the Red Sea, according to people familiar with the matter.

The number of vessel transits through the Strait of Hormuz remained in the single digits, with four ships recorded on Tuesday versus seven a day earlier, according to preliminary shipping data released on Wednesday.

Meanwhile, Umm Al Qura for Development and Construction rose 2.5% after the developer said it had sold a plot of land for 168.9 million riyals ($45.0 million).

Qatar’s benchmark index declined 1.4%, with all constituents in negative territory including Qatar Islamic Bank , which was down 2.4%.

In Abu Dhabi, the index edged down 0.2%.

Persistent regional uncertainty, maritime incidents, and stalled diplomatic talks continue to weigh on market sentiment. Investors are closely monitoring for tangible signs of diplomatic progress, including a rescheduled date for the Gulf states’ meeting with Iran, said Joseph Dahrieh, managing director at Tickmill.

“Low shipping traffic and maritime disruptions sustained caution.”

Dubai’s benchmark index rose 0.7%, with most sectors advancing. Blue-chip developer Emaar Properties gained 3.4% after its board approved a one-time special dividend of AED 4.4 billion ($1.2 billion), or AED 0.50 per share.

The Federal Reserve’s two-day policy meeting concludes later on Wednesday, when the U.S. central bank is expected to announce its latest interest rate decision. Traders have priced in a 94.5% probability of a rate hike, according to CME’s FedWatch Tool, compared with 33.1% a month earlier.

Gulf markets typically track changes in U.S. monetary policy expectations because most regional currencies are pegged to the dollar.

Outside the Gulf, Egypt’s blue-chip index lost 0.2%.