Gulf stocks muted as Trump’s Iran deadline looms

Major stock markets in the Gulf were subdued in early trade on Tuesday, as caution prevailed ahead of a deadline set by U.S. President Donald Trump for Iran to reopen the Strait of Hormuz to all shipping.

Markets have been on edge since the U.S.-Israel war on Iran erupted in late February, with Tehran effectively closing the Strait of Hormuz, a critical chokepoint for global oil supplies, and stoking fears of higher inflation.

Investors had hoped diplomatic efforts would help bring the conflict to an end, but talks have so far made no progress. Trump has set a deadline of 8 p.m. Eastern Time on Tuesday (0000 GMT Wednesday) for a deal to be reached.

Iran said on Monday it wanted a lasting end to the war with the United States and Israel, but pushed back against pressure to reopen the Strait, while Trump warned the country could be “taken out” if it failed to meet his deadline.

The uncertainty has kept investors in a risk-off mood, with the U.S. dollar holding gains and oil prices rising sharply on Tuesday.

Saudi Arabia’s benchmark index dropped 0.5%, with a 0.2% fall in Al Rajhi Bank and a 1.6% decline in Saudi Basic Industries Corp.

The kingdom said on Tuesday it intercepted and destroyed seven ballistic missiles launched towards its Eastern Region, with debris falling near energy facilities, according to the defence ministry.

Dubai’s main share index lost 0.3%, with blue-chip developer Emaar Properties declining 2.3%.

In Abu Dhabi, the index eased 0.3%.

The Qatari index edged 0.1% higher, helped by a 0.8% rise in Qatar Islamic Bank.