Dubai leads Gulf gains as investors assess US midterm fallout and Iran standoff

Gulf markets experienced a positive trend on Wednesday, with Dubai leading the regional gains. Investors were closely monitoring the aftermath of the US midterm elections and closely observing Washington's next move in the Iran crisis. US President Donald Trump acknowledged that the Iran war played a role in his party's significant midterm losses, resulting in Democrats taking control of both the House and the Senate.

Dubai's principal stock index surged 4%, driven by a 6.1% increase in Emirates NBD and a 4.4% rise in Emaar Properties, a prominent developer. Emaar Properties, a real estate company, announced it would acquire all Emaar Development shares it does not already own, offering AED 15 per share in cash through its subsidiary, Emirates Property Holdings.

Emaar Development shares climbed 4.9%. Saudi Arabia's benchmark index climbed 1.7%, propelled by a 2.2% increase in Al Rajhi Bank's stock price. The US conducted "defensive" strikes on Iran's Qeshm island, targeting surface-to-air missiles used against US assets, according to a US official. Another official stated that the strikes were limited and did not indicate a return to large-scale combat operations.

In an interview with the Financial Times on Tuesday, Trump expressed satisfaction with the current standoff with Iran. Positive sentiment was bolstered by progress in mediation efforts and the belief that the US was unlikely to engage in military action. Strong domestic fundamentals and the ongoing third-quarter earnings season contributed to the market's resilience, according to Hani Abuagla, Senior Market Analyst at XTB MENA.

In Qatar, the index jumped 2.8%, with almost all its constituents showing positive movement. The Gulf's largest lender, Qatar National Bank, increased by 5.3%. The Abu Dhabi index slightly reversed earlier gains and closed flat. Outside the Gulf, Egypt's blue-chip index ended 2.8% higher, with Foreign Minister Badr Abdelatty informing the Iranian counterpart, Abbas Araqchi, that all parties should demonstrate flexibility and pursue a political resolution to the regional crisis.