Gulf bourses close higher on hopes for US-Iran peace talks

Gulf stock markets ended higher on Wednesday, extending gains from the previous session, as hopes for renewed U.S.-Iran peace talks lifted investor sentiment.

The optimism came even as Washington said on Wednesday that its military had fully halted sea trade to and from Iran, with investors remaining focused on signs that diplomatic engagement in the Middle East could continue.

President Donald Trump said talks with Tehran to end the war could soon resume and potentially yield a deal, telling ABC News to watch for an “amazing two days.”

Adding to signs of continued diplomatic engagementwas a statement by Iran’s foreign ministry saying that a Pakistani delegation was highly likely to arrive in Tehran on Wednesday to relay U.S. messages as part of ongoing communication between Tehran and Washington.

Dubai’s main share index advanced 2.6%, buoyed by a 3.2% rise in blue-chip developer Emaar Properties and a 2.5% increase in top lender Emirates NBD .

Budget airliner Air Arabia jumped 6.5%.

In Abu Dhabi, the index concluded 0.5% higher, with Aldar Properties adding 0.6%.

GCC equity markets extended gains as hopes for diplomatic progress and easing regional tensions improved sentiment, said Joseph Dahrieh, Managing Director at Tickmill.

He added that solid domestic fundamentals and stronger confidence continued to support the rally, although markets remain vulnerable to any setback in the diplomatic outlook that could trigger fresh short-term volatility.

Saudi Arabia’s benchmark index climbed 0.9%, with Al Rajhi Bank rising 1%.

Elsewhere, oil major Saudi Aramco closed 0.7% higher.

Brent crude futures were up 71 cents, or 0.8%, to $95.50 a barrel after slumping nearly 5% overnight to below $100.

“From a medium-term perspective, elevated oil prices could remain a supportive factor, particularly if shipping disruptions ease,” said Dahrieh.

Separately, the International Monetary Fund said on Tuesday that growth in the Middle East and North Africa will slow sharply this year as oil exporters face fallout from the Iran war.

The Qatari index rose 0.4%, led by a 1.4% rise in the Gulf’s biggest lender Qatar National Bank .

The Gulf state denied any talks with Iran over payments to halt attacks, saying its demands were instead being conveyed through Pakistan and the United States, spokesperson Majed Al-Ansari said.

Outside the Gulf, Egypt’s blue-chip index rose 1.5%, with Commercial International Bank finishing 2.6% higher.