Mideast Stocks: Major Gulf markets decline as regional conflict escalates
Major stock markets in the Gulf fell in early trade on Thursday amid investor jitters over potential U.S. involvement in the escalating Israel-Iran conflict.
Israel struck a key Iranian nuclear site on Thursday and Iranian missiles hit an Israeli hospital while President Donald Trump kept the world guessing about whether the U.S. would join air strikes seeking to destroy Tehran's nuclear facilities.
Saudi Arabia's benchmark index dropped 0.2%, dragged down by a 0.4% fall in Al Rajhi Bank and a 0.6% decrease in oil behemoth Saudi Aramco.
The Saudi index is on course for its biggest weekly fall in over two months.
However, Prince Alwaleed Bin Talal-backed airline Flynas advanced 3% to 79.60 riyals per share, a day after falling over 3% on its debut.
The airline, which sold a 30% stake to investors in the first IPO by a Gulf airline in almost 20 years, was priced at the top of its range at 80 riyals per share.
Dubai's main share index declined 1.3%, dragged down by a 2.4% slide in blue-chip developer Emaar Properties and a 2% retreat in sharia-compliant lender Dubai Islamic Bank.
Elsewhere, budget airliner Air Arabia was down 1.6%.
In Abu Dhabi, the index eased 0.1%. Overnight, the Federal Reserve held rates steady as expected but retained projections for two quarter-point rate cuts this year.
The Fed's decisions impact monetary policy in the Gulf, where most currencies, including the riyals, are pegged to the U.S. dollar.
The Qatari benchmark fell 0.8%, with Qatar Islamic Bank losing 1.6%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
23 minutes ago
- The National
'Iran can defend itself': Tehran's proxies left on the substitute bench
As the conflict between Israel and Iran dramatically escalates, with the US considering whether to intervene to back its long-time ally, a pressing question has emerged: will Tehran's proxies rush to the rescue of their patron? Hostilities between Iran and Israel have reached unprecedented levels, entering a seventh day of confrontation, after Israel launched attacks last Friday on Iran claiming to prevent the country from acquiring a nuclear weapon. The strikes prompted a series of retaliatory missile barrages from Iran. Sources in Iran's proxy groups have shared differing views on whether they will join the fight with Iran. A Hezbollah source says it will remain on the sidelines, regardless of whether the US intervenes, while Yemen's Houthi rebels are the only proxy to have announced attacks against Israel in support of Iran. The proxy groups, however, have stressed their autonomy from Tehran. The so-called Axis of Resistance is an Iran-led network that includes Hamas in Palestine, Hezbollah in Lebanon, the Houthis in Yemen and armed groups in Iraq, whose aim is to deter Israel from conducting military action and countering its influence in the region. Many of these groups have fought against Iran's enemies in their respective countries. The groups launched attacks against Israel as part of a support campaign for Hamas and the Palestinian people after the Gaza war broke out on October 7, 2023. But months of fighting with Israel, which holds clear military dominance, has considerably eroded the operational capacity of the axis. Hezbollah, once a formidable militia and Iran's most powerful proxy, was battered by nearly 14 months of conflict with Israel that ended in November, leaving much of its chain of command dismantled and its arsenal decimated. The group has made it clear that it does not intend to take part in any retaliatory action to support Iran. Lebanese MP Hassan Fadlallah described Iran as a 'key regional power' that is capable of defending itself, in an interview with pro-Hezbollah outlet Al Mayadeen. 'It does not ask others to fight on its behalf,' he said. The group is under pressure to disarm and faces growing discontent from those in Lebanon who accuse it of dragging the cash-strapped country into a war it could not afford, and causing damage worth several billion dollars. Once a kingmaker, Hezbollah is now grappling with a loss of influence within the Lebanese political scene. A Lebanese official told The National that the army sent a message to Hezbollah, urging it not to intervene in the Iran-Israel conflict and warning against dragging the country into yet another devastating war. 'They said they wouldn't,' the official said. 'We're doing everything we can, calls, meetings, to prevent any escalation,' the official added. 'This is not our war." Some fear a potential US intervention against Iran might compel Hezbollah to join the fight. Statements attributed to an Iranian official suggested that, if the US became directly involved – an idea President Donald Trump has been publicly floating for days – Hezbollah would join forces with Tehran. A Hezbollah source firmly denied the claim. 'I don't think the statement is true … who is this source? Iran can defend itself,' the source told The National. The sources confirmed that it was a Hezbollah decision, not an Iranian decision. 'Unfortunately the media fabricates fake news." Cautious but ready In Iraq, which is home to several Tehran-backed militias that, unlike Hezbollah, remain largely intact, a senior militant leader told The National that the decision to open a front would depend 'on developments". 'The current situation calls for caution and wisdom, but also readiness to respond if Iran comes under full-scale attack,' he said. The militant said US intervention could be a game-changer in how the groups perceive their role in the conflict. 'We advise the United States not to get involved in the war – it has tried before and ended in failure," he said. "Any American aggression against Iran will directly affect Iraq, and Iraqis have the right to defend their sovereignty, religious beliefs and dignity." He warned that any attempt at regime change in Iran – which Israeli Prime Minister Benjamin Netanyahu has shown increasing interest in, beyond merely destroying Iran's nuclear capabilities – would lead to regional chaos. 'Iraq lies between two blazing arenas, and the resistance factions will not stand idly by," he added. Yemen's Houthis are the only proxy group to have announced joint military co-operation with Tehran since the recent escalation. The Houthis have launched attacks against Israel and ships in the Red Sea in support of Palestinians in Gaza since October 2023. On Sunday, the group said it fired ballistic missiles at Israel in support of 'the oppressed Palestinian and Iranian peoples". A Yemeni source in the capital Sanaa said there was 'no joint operations room between the Iranians and the Houthis", but rather continued co-ordination. 'When Houthis are required to strike, they carry out the strike independently," the source added. "This is what we've observed in the nature of their operations. This is also what Sanaa and Iranian officials have affirmed since the beginning of the operations, that Yemen acts on its own, deciding when it is in its interest to escalate, de-escalate, or strike a particular area."
Zawya
30 minutes ago
- Zawya
Oil prices jump as Israel-Iran conflict enters seventh day
Oil prices rose on Thursday after Israel and Iran continued to exchange missile attacks overnight and U.S. President Donald Trump's stance on the conflict kept investors on edge. Brent crude futures rose $1.06, or 1.4%, to $77.76 a barrel by 1151 GMT. U.S. West Texas Intermediate crude for July was up $1.26, or 1.7%, at $76.40. Brent had surged to its highest in nearly five months at $78.50 on June 13, when Israel began its attacks. The conflict entered its seventh day on Thursday after Israel struck Iranian nuclear sites and Iranian missiles hit an Israeli hospital. There is still a "healthy risk premium baked into the price as traders wait to see whether the next stage of the Israel-Iran conflict is a U.S. strike or peace talks", said Tony Sycamore, analyst at trading platform IG. Goldman Sachs said on Wednesday that a geopolitical risk premium of about $10 a barrel is justified, given lower Iranian supply and risk of wider disruption that could push Brent crude above $90. President Trump told reporters on Wednesday that he had yet to decide whether the U.S. will join Israel in its attacks on Iran. As a result of the unpredictability that has long characterised Trump's foreign policy, "markets remain jittery, awaiting firmer signals that could influence global oil supply and regional stability" said Priyanka Sachdeva, analyst at Phillip Nova. The risk of major energy disruption will rise if Iran feels existentially threatened, and U.S. entry into the conflict could trigger direct attacks on tankers and energy infrastructure, said RBC Capital analyst Helima Croft. Iran is the third-largest producer among members of the Organization of the Petroleum Exporting Countries, extracting about 3.3 million barrels per day (bpd) of crude oil. About 18 million to 21 million bpd of oil and oil products move through the Strait of Hormuz along Iran's southern coast and there is widespread concern the fighting could disrupt trade flows. Separately, the U.S. Federal Reserve kept interest rates steady on Wednesday but pencilled in two cuts by the end of the year. Lower interest rates could stimulate the economy, helping to support demand for oil. On the supply side, U.S. crude stockpiles fell sharply last week, registering the largest decline in a year, the Energy Information Administration said on Wednesday. Russia, the U.S. and Saudi Arabia could act jointly to stabilise oil markets if needed, Russia's investment envoy Kirill Dmitriev told Reuters.
Zawya
30 minutes ago
- Zawya
Saudi energy minister on potential loss of Iranian oil: we only react to realities
Saudi Energy Minister Prince Abdulaziz bin Salman, asked if the kingdom and Russia would step in to replace any potential loss of Iranian oil, said on Thursday that the country will "only react to realities". The prince, speaking at an economic forum in St Petersburg, added that OPEC+ has been a reliable organisation that was attentive to circumstances when they prevailed, declining to comment on hypothetical questions. Oil prices have risen more than $10 over the past week on Middle East escalations after Israel attacked Iran last week. While the two foes have targeted energy infrastructure in each other's countries, a disruption to Middle Eastern oil exports or production has yet to happen. The U.S. is weighing a direct involvement in the conflict, an option which analysts say would raise the risk premium to oil prices even higher, increasing the chances of disruptions to energy supplies. Iran is a member of the Organization of the Petroleum Exporting Countries, but is exempt from production cuts that the group along with other allies including Russia have in place. OPEC+, as the alliance is known, was in the process of increasing production targets for eight of its members before Israel's attack on Iran last week. The group of eight which includes Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Oman, Algeria and Kazakhstan will meet next on July 6 to decide on whether to increase production further from August. At their last meeting, Russia favoured pausing an output hike of 411,000 bpd for July, but eventually agreed for the hike to go ahead. (Reporting by Ahmad Ghaddar, Vladimir Soldatkin and Olesya Astakhova; Editing by Mark Trevelyan and Louise Heavens)
