Yemen investigating 'toxic substances' allegedly used by Houthis in Taiz

Gulf stock markets saw a rise on Tuesday as diplomatic efforts to de-escalate the Middle East conflict continued. This occurred a day after Saudi, Turkish and Pakistani officials met in Tehran for the first time since hostile US-Israeli strikes on Iran triggered a war that spread to Saudi Arabia and Yemen. Saudi Arabia's benchmark index climbed 2.3%, driven by a 2.8% increase in Al Rajhi Bank.

First Milling Company soared 9.9% following the announcement of a significant rise in quarterly profits. Saudi Aramco, an oil behemoth, ended the day 1.7% higher. Methanol Chemical Company gained 9.3% after reporting a narrower quarterly loss. Meanwhile, OPEC+ is expected to maintain its December oil output targets unchanged on Sunday, according to three sources familiar with the matter.

Despite this positive development, regional tensions remain high. The Saudi-led coalition in Yemen reported on Tuesday that they had destroyed ballistic missiles and drones launched by the Houthis at two regions of Saudi Arabia. However, the Houthis claimed to have attacked the Ras Tanura oil refinery, Saudi Arabia's largest, located west of the Strait of Hormuz.

Dubai's main index surged 2%, fueled by a 3.4% rise in blue-chip developer Emaar Properties. GCC stocks continued to gain as geopolitical concerns eased and regional diplomacy boosted sentiment. Shipping disruptions on key maritime routes persist as a risk, but strong third-quarter earnings could provide additional support. DIP Holding, the owner of the Dubai Investments Park real estate business, plans to raise up to $543 million in an initial public offering, potentially making it the UAE's first stock listing this year.

In Abu Dhabi, the index increased by 1.1%, with Abu Dhabi Islamic Bank climbing 5.7%. Following market close, the sharia-compliant lender reported a slight increase in third-quarter profits. Among other gainers, Aldar Properties rose 1.6% on improved quarterly earnings. Qatar's index jumped 3.4%, marking its best session since April, with the Gulf heavyweight Qatar National Bank surging 3.1%.

The index had previously hit a six-year low last week. Outside the Gulf, Egypt's blue-chip index closed 3.5% higher, with all its constituents posting positive results. Egypt's parliament authorized President Abdel Fattah al-Sisi on Monday to use "all necessary measures" to aid Saudi Arabia, potentially leading to direct involvement against the Houthis.

Saudi Arabia rose 2.3% to close at 9,986, while Abu Dhabi rose 1.1% to 9,746, Dubai gained 2% to 5,864, Qatar jumped 3.4% to 9,151, Egypt advanced 3.5% to 50,105, Bahrain dropped 0.3% to 1,840, Oman fell 0.1% to 7,348, and Kuwait increased 0.9% to 9,017.