Gulf stocks close higher as Trump dials back Iran strike talk

Gulf bourses ended higher on Tuesday after US President Donald Trump said military action against Iran isn’t needed “at this point”.

Trump plans to hold off on fresh strikes for now after appeals from regional allies including Qatar’s prime minister.

However, the naval blockade in the Strait of Hormuz stays in place for the time being.

Saudi Arabia’s benchmark index rose 0.6%, with Al Rajhi Bank gaining 2.6% and the country’s biggest lender by assets Saudi National closing 0.8% higher.

On the other hand, oil major Saudi Aramco dropped 1.9%.

Saudi-led coalition forces in Yemen said Tuesday they intercepted two missiles fired by the Iran-aligned Houthis at Riyadh. A ballistic missile heading for the kingdom’s south and a drone over the Eastern Province were also intercepted. The overnight salvo points to a sharp spike in military activity across Saudi territory.

The Eastern Province is the kingdom’s economic engine. It holds most of Saudi Arabia’s oil and gas reserves and houses the headquarters of Aramco. That site took heavy damage in an October attack.

Gulf bourses extended their rally as calmer regional news brightened investor mood. Fresh confirmation that new military strikes are off the table added momentum. Traders are now watching negotiations that could ease shipping disruption at key sea lanes. Strong third-quarter earnings also helped push prices higher, said Milad Azar, market analyst at XTB MENA.

Dubai’s main share index advanced 1.4%, buoyed by a 3.5% jump in top lender Emirates NBD .

Elsewhere, logistics firm Aramex surged 7.5% — to be the top gainer on the index — following a steep rise in third-quarter profit.

In Abu Dhabi, the index was up 0.8%, while the Qatari index gained 0.7%.

Outside the Gulf, Egypt’s blue-chip index advanced 2.1%, with Commercial International Bank rising 2.3%, after reporting a rise in third-quarter net interest income.