Gulf Stock Markets Surge Amid Geopolitical Tensions

Most stock markets in the Gulf region concluded trading on a positive note Monday, propelled by rising crude values as investors closely monitored potential Iranian reactions to recent U.S. actions. There was palpable anxiety among investors as they assessed potential countermeasures from Iran regarding U.S. strikes.

Crude values earlier reached a five-month peak before slightly decreasing. This occurred as maritime oil and gas transport persisted from the Middle East following airstrikes over the weekend.

Market observers are anticipating further increases in prices due to escalating concerns that Iran’s response might involve obstructing the Strait of Hormuz, a vital route for approximately one-fifth of the world’s oil supply.

The Saudi benchmark index saw an increase of 1.3%, supported by a 1.6% gain in Al Rajhi Bank shares and a 1.5% rise in Saudi National Bank, the country’s largest lender.

Investors appeared to minimize the likelihood of further escalation in the area’s military tensions, encouraged by the prospect, albeit slim, of upcoming peace negotiations. Hani Abuagla, a Senior Market Analyst at XTB MENA, suggested this bullish momentum might be short-lived given the ongoing volatility.

He cautioned, “The situation could deteriorate if Iran were to block the Strait of Hormuz, potentially causing interruptions in oil supplies and further intensifying military actions.”

Dubai’s main index rose by 1.1%, driven by a 2.8% surge in Emaar Properties, a major developer, and a 1.8% increase in Dubai Islamic Bank, a Sharia-compliant financial institution.

Abuagla noted that a resurgence in risk appetite among investors has bolstered the Dubai market, with attention reverting to robust economic fundamentals that could sustain further recovery if current trends persist.

In Abu Dhabi, the exchange ended 0.5% higher.

The Qatari index experienced a 0.5% rise, with Industries Qatar, a petrochemical manufacturer, increasing by 0.8%.

Gulf countries, hosting numerous U.S. military installations, heightened their alertness on Sunday. Their leaders urged all involved parties to practice utmost restraint following the U.S. strikes, which heightened the risk of a broader regional conflict.

Nuclear regulatory bodies in Saudi Arabia and the UAE have stated that they have detected no indications of radioactive contamination after the strikes.

Outside the Gulf region, Egypt’s blue-chip index climbed 1.2%, with EFG Holding Co, an investment bank, surging by 7.2%.