Gulf equities mixed amid US-Iran flare-ups

Gulf stock markets experienced a rollercoaster of sentiment on Monday due to heightened tensions between the United States and Iran, coupled with additional attacks on shipping in the region. The escalating conflict led to worries among investors about the potential impact on regional energy infrastructure. Saudi Arabia's key index saw a decline of 0.4%, driven by a 0.5% drop in Al Rajhi Bank and a 0.2% decrease in oil giant Saudi Aramco.

The Financial Times also reported that Aramco's Jazan refinery was struck on Monday, with ongoing damage assessments. Among other decliners, Saudi Ground Services Co plummeted 7%, marking the index's worst performer after flynas announced it would terminate its ground handling agreement in March 2027. Yanbu National Petrochemical Co slipped 4.1% as the stock traded ex-dividend.

Despite the overall mixed performance, Dubai's main share index managed to rise by 0.8%, propelled by a 1.3% increase in blue-chip developer Emaar Properties. Abu Dhabi's index remained largely unchanged. Analyst Daniel Takieddine of Sky Links Capital Group noted that Gulf equities will likely remain vulnerable to developments in the Strait of Hormuz, such as shipping traffic and alterations to maritime corridors.

He further emphasized that de-escalation efforts could help alleviate the downside, but the lack of a clear diplomatic timeline means caution will prevail. UAE presidential adviser Anwar Gargash highlighted the risk of holding energy exports hostage, stating that rebuilding trust with Iran could take decades. The Qatari index climbed 0.5%.

Outside of the Gulf, Egypt's blue-chip index dipped by 0.1%, with Commercial International Bank Egypt falling 1.4%. Saudi Arabia saw a 0.4% decrease to 11,025, while Abu Dhabi held steady at 9,976, Dubai gained 0.8% to 5,931, Qatar rose 0.5% to 9,786, Egypt fell 0.1% to 56,628, Bahrain declined 0.1% to 1,935, Oman dropped 0.3% to 7,606, and Kuwait surged 1.2% to 9,340.