Most Gulf markets retreat on Iran war jitters

Most major Gulf stock markets fell on Wednesday as hostilities flared after U.S.-Iran peace talks stalled.

The U.S. military reported that Iranian missile attacks targeting Bahrain, Kuwait, and other sites were either intercepted or failed, while diplomatic efforts between Washington and Tehran remained at an impasse.

Iran’s Revolutionary Guards said they had targeted the U.S. Fifth Fleet headquarters.

Despite both sides signalling a preliminary deal last week, no agreement has been formally endorsed.

Saudi Arabia’s benchmark index fell 0.1%, hit by a 2.9% slide in Banque Saudi Fransi and a 0.4% drop in oil major Saudi Aramco.

A survey showed the kingdom’s non-oil private sector grew at its fastest pace in three months in May, supported by stronger domestic demand and stabilising supply chains, though business optimism remained subdued amid the conflict in the region.

Gulf stock markets weakened as investors turned cautious, though hopes for a diplomatic breakthrough could limit further losses, said Joseph Dahrieh, managing director at Tickmill.

He added that solid domestic economic conditions may help support confidence.

Dubai’s main share index dropped 0.8%, with blue-chip developer Emaar Properties and sharia-compliant lender Dubai Islamic Bank both retreating 2.4%.

In Abu Dhabi, the index was down 0.4%.

The Qatari index eased 0.1%, with petrochemicals maker Industries Qatar dropping 1.4%.

Outside the Gulf, Egypt’s blue-chip index fell 0.7%.