Most Gulf shares in red on regional uncertainty, shipping concerns

Gulf equity markets declined on Thursday due to a lack of advancement in US-Iran talks and lingering risks to shipping through the Strait of Hormuz, which unsettled investors. Iran’s Supreme National Security Council Secretary Mohsen Rezaei warned on Wednesday that if neighboring countries collaborate with Washington to stop Iranian flights, Tehran would prevent their airports from operating.

Despite ongoing diplomatic efforts, disagreements between Tehran and Washington persist over resolving the conflict. An Iranian official stated that diplomacy must continue, even though Iran’s president declared the country would not yield to US pressure at the UN General Assembly. Geopolitical uncertainty continued to affect shipping in the Strait of Hormuz, where 10 commodity vessels passed through on Wednesday, up from 7 the previous day but still below the 10-day average of approximately 17.

Saudi Arabia’s leading index fell 0.8%, driven by a 2% drop in Al Rajhi Bank. Dubai’s primary share index decreased 0.4%, with leading lender Emirates NBD shedding 2.5%. Abu Dhabi’s index slipped 0.6%. The GCC stocks faced pressure as investors monitored US-Iran talks and the possibility of reopening the Strait of Hormuz. Slow progress, low shipping volumes, and continuous maritime disruptions dampened risk appetite, according to George Pavel, general manager at Naga.com.

Additionally, the UAE central bank suspended Iran’s Bank Melli from operating in the country, highlighting the deteriorating relations between the two countries since the US war on Iran began in February. The Qatari index dropped 0.7%, with the Gulf’s largest lender Qatar National Bank falling 1%. Outside the Gulf, Egypt’s blue-chip index fell 0.8%.

Saudi Arabia lost 0.8% to 10,599, Abu Dhabi declined 0.6% to 10,206, Dubai fell 0.4% to 5,983, Qatar decreased 0.7% to 9,478, Egypt dropped 0.8% to 53,777, Bahrain remained flat at 1,903, Oman closed flat at 7,554, and Kuwait stayed flat at 9,227.