UAE stocks slip amid escalating Middle East conflict

UAE stock markets closed lower on Friday, as the escalating conflict in the Middle East weighed on investor sentiment, with U.S. President Donald Trump promising “major military punishment” for Iran and its Houthi allies.

Trump’s comments on Thursday came after Yemen’s Houthi fighters attacked two Saudi oil tankers in the Red Sea, stoking concerns of a broader regional conflict.

Oil prices - a key catalyst for the Gulf’s financial market - were on course for a near 10% jump during the week, even as it was down 3% for the day at $97.67 a barrel by 1138 GMT.

Dubai’s main market slipped 0.2% to a near 7-week low, pressured by a 1.5% fall in Dubai Islamic Bank , while business park operator Tecom Group declined 2.1%.

Supporting the index was National Central Cooling Company (Tabreed)‘s 4.4% gain after Reuters reported that U.S. infrastructure investor I Squared Capital had joined Saudi Arabia’s Saudi Tabreed, partly owned by the Abu Dhabi company, in bidding for the district cooling assets of Riyadh’s King Abdullah Financial District.

UAE markets were under some pressure, but continued to trade near the levels seen this week, said Daniel Takieddine, co-founder and CEO of Sky Links Capital Group.

“Sentiment remained cautious as geopolitical tensions in the region continue and maritime traffic disruptions persist.”

Abu Dhabi’s benchmark index edged 0.1% lower, weighed down by a 0.7% drop in conglomerate Alpha Dhabi Holding and real estate giant Aldar Properties slipping 0.5%.

Abu Dhabi Commercial Bank , UAE’s third-largest lender, closed 0.1% higher after reporting a 31% year-on-year growth in second-quarter net profit to 3.38 billion dirhams ($920.33 million).

For the week, the Dubai index fell 0.5%, its third consecutive weekly loss, while Abu Dhabi notched a 0.5% gain, according to data compiled by LSEG.