Gulf markets mixed as oil slides, investors assess Iran diplomacy

BENGALURU: Gulf stock markets ended mixed on Wednesday as investors assessed fresh U.S. economic pressure on Iran and signs of progress in Pakistan-mediated talks with Tehran, while lower oil prices weighed on sentiment.

Brent crude, a key catalyst for Gulf financial markets, fell more than 2% on hopes that the Strait of Hormuz could reopen. It was trading at $86.43 a barrel at 1230 GMT.

Iran said it had resumed talks with Oman on managing the waterway amid heightened U.S. economic pressure. Washington earlier this week threatened to punish countries continuing to do business with Iran, though it said sanctions would not be imposed immediately.

Pakistan and Iran also made “significant progress” in talks on the U.S.-Israeli war on Iran and a path to peace, Pakistan’s interior minister said on Tuesday following a visit to Tehran.

Saudi Arabia’s benchmark index rose 0.3%, with Etihad Etisalat Company gaining 3.1% and Saudi Arabian Mining Company adding 1.3%. Oil giant Saudi Aramco fell 0.7%, while National Shipping Company of Saudi Arabia lost 2.3%.

Dubai’s main index gained 0.6%, led by communications and industrial shares. Toll-road operator Salik rose 1.9%, while construction firm ALEC Holdings surged 7.9%.

Qatar’s index advanced 0.7%, with nearly all constituents ending higher. Qatar National Bank gained 0.7%, while Industries Qatar and Qatar Gas Transport rose 1.6% and 1.7%, respectively.

QatarEnergy issued its first tender to offer crude through ship-to-ship transfers outside the Strait of Hormuz, joining other Gulf producers in shifting loading operations beyond the waterway, trade sources said.

Abu Dhabi’s benchmark declined 0.3%, weighed down by a 1.5% fall in ADNOC Gas and a 1% drop in conglomerate International Holding Co .

“GCC markets were mixed as investors monitor diplomatic developments in the region,” said Milad Azar, market analyst at XTB MENA.

“Despite progress towards establishing a shipping corridor, setbacks remain possible and could affect risk appetite amid ongoing uncertainty,” Azar said, adding that strong local fundamentals and government investment initiatives could continue to support markets.

Outside the Gulf, Egypt’s blue-chip index eased 0.3%, pressured by healthcare and real estate stocks. Commercial International Bank fell 1.2%, while Talaat Moustafa Group slipped 1%.