DUBAI: Most Gulf stock markets ended lower on Tuesday, with the Qatar benchmark extending its decline after the country halted liquefied natural gas production amid an escalating air war in the region, while Egypt slipped for a third day.
Israel broadened its campaign with new strikes on Iran and Hezbollah, while Tehran launched missiles and drones toward Israel, several Gulf states and a British air base in Cyprus, raising concerns of a prolonged conflict.
Qatar’s state-owned QatarEnergy, 82 percent of whose clients are in Asia, was set to declare force majeure on its LNG shipments after Iranian drone attacks on facilities in the sprawling Ras Laffan complex.
The country’s benchmark index trimmed early losses to close 0.7 percent lower, pressured by a 1.9 percent drop in Qatar National Bank , the Gulf’s biggest lender by assets.
Among gainers, petrochemical firm Industries Qatar advanced 2 percent and Qatar Fuel was up 1.9 percent.
Risk-off sentiment still dominates the Qatari exchange, though losses have eased compared with the sharper declines in earlier sessions. Any rebound will likely hinge on how regional tensions evolve and whether disruptions inside Qatar persist, said George Pavel General Manager at Naga.com Middle East.
Qatarcondemned Iranian attacks on its territory and said, in a letter to the UN Secretary-General and the president of the Security Council on Monday, that it reserved the right to retaliate.
In Muscat, the index retreated 1.5 percent in broad declines, while the Kuwaiti index reversed early losses to finish 0.9 percent higher.
Gulf Cooperation Council sovereign wealth funds can play a pivotal role in supporting local equity markets by boosting liquidity and deploying additional capital to strengthen investor sentiment.
This is an ideal moment to channel that support through fund-of-funds structures, said Samer Hasn, senior market analyst at XS.com.
Meanwhile, oil prices rose for a third straight day on Tuesday as threats to shipping through the Strait of Hormuz heightened fears of supply disruptions. Iran’s Revolutionary Guards commander said on Monday that the strait was closed and warned that Iran would set on fire any ship attempting to pass, Iranian media reported.
Saudi Arabia’s benchmark index rose 0.7 percent, lifted by a 0.9 percent rise in Rajhi Bank and a 1.9 percent climb in oil major Saudi Aramco, while petrochemical maker Saudi Basic Industries Corp, in which Aramco owns 70 percent, added 4.2 percent.
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