Most Gulf equities decline as war fuels uncertainty

DUBAI: Most Gulf stock markets ended lower on Monday, led by losses in Dubai as the US and Israel’s war with Iran weighed on investor sentiment. Over the weekend, Trump threatened further strikes on Iran’s Kharg Island — which accounts for roughly 90 percent of the country’s oil exports — after earlier attacks on military targets prompted a defiant response from Tehran and raised the prospect of further retaliation.

Shortly after the attacks on Kharg, Iranian drones struck a major oil terminal in Fujairah, United Arab Emirates. Although oil loading operations at Fujairah have resumed, four sources said it was unclear whether activity has fully returned to normal.

Dubai’s main share index declined 2.5 percent, dragged down by a 4.9 percent slide in blue-chip developer Emaar Properties and a 1.7 percent retreat in top lender Emirates NBD .

Since the conflict began, the index has shed more than 18 percent, bringing its valuation down to 843.25 billion dirhams (USD229.61 billion). Citigroup is keeping most branches and offices in the UAE closed until further notice after temporarily closing them last week, the bank said on Monday, the latest sign of the impact on the industry of the Iran war.

Gulf equities are showing a growing divergence as the regional conflict drives a swift repricing of risk amid persistently high trading volumes, said Ahmad Assiri, research strategist at Pepperstone.

“While the overarching narrative remains anchored by energy fundamentals, the price action reveals a market at a crossroads where investor conviction is being tested by shifting security dynamics in critical maritime corridors.”

In Abu Dhabi, the index lost 0.2 percent, hit by a 3.5 percent drop in Aldar Properties.

Meanwhile, the bourse’s market capitalization has shrunk to USD771.9 billion, down nearly USD77.2 billion from pre-conflict levels.

Earlier this month, the Dubai and Abu Dhabi exchanges introduced a temporary 5 percent daily downside limit on listed securities and suspended trading on March 2 and March 3, as part of broader measures to curb volatility and maintain orderly market conditions.

Saudi Arabia’s benchmark index gained 0.6 percent, led by a 1.1 percent rise in the country’s biggest lender by assets Saudi National Bank.