Middle Eastern stock markets rebounded on Thursday, with Saudi outperforming the region, as investors repositioned themselves on signs of no further escalation between Tehran and Washington.

US President Donald Trump responded to an Iranian attack on US forces with sanctions, not violence. On Wednesday, Iran fired missiles at military bases housing US troops in Iraq in retaliation for a US drone strike that killed an Iranian general.

Saudi Arabia's benchmark index advanced 2.7%, its biggest intraday gain since Oct. 2018. Al Rajhi Bank leapt 2.3%, while state-owned Saudi Aramco climbed 2.3% to 35 riyals, snapping four straight days of losses.

897.2 million riyals ($239.19 million) worth of Aramco shares were traded by the close, with around 25.8 million shares exchanging hands, Refinitiv data showed.

Dubai's main share index rebounded 1.3%, a day after it fell 1.2%, led by gains at financial shares. Dubai Islamic Bank, the United Arab Emirates largest sharia-compliant lender, rose 1.3% and Emirates NBD Bank was up 1.2%.

In Abu Dhabi, the index added 1.1% driven by a 1.3% rise in First Abu Dhabi Bank and a 1.7% increase in Abu Dhabi Commercial Bank.

The Qatari Index closed 1% up with lender Masraf Al Rayan and Qatar National Bank rising 2.3% and 0.8%, respectively.

Elsewhere, Kuwait's index was also up, ending 1.9% higher, as all the stocks on the index gained.

Outside the Gulf, Egypt's blue-chip index increased 1.7%, extending the previous day's gains. Commercial International Bank, the country's largest lender, was up 1.2% and Egypt Kuwait Holding jumped 4.2%.

Stock exchange data on Thursday showed that Egyptian investors were net-buyers of the stocks.