Gulf shares slip after fresh attacks rattle truce

Most stock markets in the Gulf ended lower on Tuesday after fresh attacks by Iran and the United States in the Gulf shook an already fragile truce.

Washington is pushing to reopen the Strait of Hormuz to ease the severe strain on global energy supplies after Iran largely shut the passage following the start of the war with the U.S. and Israel on February 28.

After reported Iranian drone and missile attacks across the UAE, including one that sparked a fire at the key oil port of Fujairah, the UAE said the strikes marked a serious escalation and that it reserved the right to respond.

Fujairah has been critical to UAE oil exports during the Iran war as it sits at the end of the Abu Dhabi Crude Oil Pipeline, which carries crude from inland fields to the Gulf of Oman, bypassing the Strait of Hormuz.

Dubai’s main share index dropped 0.9%, dragged by a 3.6% slide in budget airline Air Arabia and a 5% plunge in Mashreqbank .

In Abu Dhabi, the benchmark index declined 0.3%, with Aldar Properties losing 0.3%.

UAE authorities on Monday issued mobile phone alerts in Dubai and Abu Dhabi warning of the possibility of missile attacks.

Meanwhile, the UAE’s non-oil private sector expanded at its slowest pace since February 2021 in April as the Iran war hammered shipping and tourism, hitting sales and exports alike, a survey showed on Tuesday.

Saudi Arabia’s benchmark index lost 0.8%, with Al Rajhi Bank falling 1% and Saudi Arabian Mining Company declining 1.4%.

The GCC remained under pressure as investors stayed cautious following the rise in regional tensions a day earlier. Markets are likely to remain sensitive to geopolitical headlines and developments on the ground, said Milad Azar, market analyst at XTB MENA.

“Concerns about the sustainability of the current ceasefire and the resurgence of incidents could keep markets on edge.” said Azar.

Brent crude futures eased $1.38, or 1.2%, to $113.06 a barrel at 1108 GMT after settling up 5.8% on Monday.

The Qatari index  was down 0.6%, with Qatar Islamic Bank falling 1.1%.

Outside the Gulf Egypt’s blue-chip index advanced 1.1%, with Commercial International Bank gaining 2.3%.

Egypt has raised natural gas prices for several energy-intensive industries starting May, according to a prime ministerial decree published on Sunday.