Gulf markets gain on hopes Iran strikes will stay off the table
Gulf bourses closed mostly higher on Monday as US President Donald Trump’s signal that fresh Iran strikes are unlikely, provided talks continue, lifted sentiment across the region after an eight-month conflict. Trump’s remarks came despite reports from the US military and Iranian state media that shipping had been attacked in or near the Strait of Hormuz, a vital waterway that carried nearly a…
Gulf markets experienced a surge on Monday, buoyed by the prospect that Iran would refrain from launching any new strikes in the region, as long as ongoing talks persisted. This sentiment was a stark contrast to the eight-month conflict that had previously dominated the area. President Donald Trump's remarks, which followed reports of shipping attacks in or near the Strait of Hormuz, provided a sense of relief across the region.
Despite Trump's earlier hints of renewed attacks post-midterm elections, no large-scale military operations had transpired, leaving Tehran to threaten retaliation against US and Israeli targets.
Saudi Arabia's benchmark index saw a rise of 0.9%, with Al Rajhi Bank leading the gains at 1.9%, and Perfect Presentation For Commercial Services surging by 4.3% following a boost in its quarterly profits. In Dubai, the main share index climbed by 1%, while the blue-chip developer Emaar Properties made a 2.4% increase. Abu Dhabi's index also saw a 1% increase.
While the disruption in shipping through the Strait of Hormuz continued to pose challenges, strong regional economic data kept investors optimistic. Daniel Takieddine, Co-founder and CEO of Sky Links Capital Group, attributed the market's resilience to the optimism stemming from the ongoing dialogues between Washington and Tehran.
Anwar Gargash, a senior Emirati official, cautioned that a prolonged period of uncertainty might lie ahead, as achieving a comprehensive political deal between the two nations appeared unlikely. He emphasized the need to prepare for an uncertain future, where neither a decisive resolution nor a stable regional order could be guaranteed.
The Qatari index also saw an increase of 0.9%, propelled by a 1.5% rise in the Gulf's largest lender, Qatar National Bank. Outside the Gulf, Egypt's blue-chip index rose by 1.2%, with Telecom Egypt closing 3.3% higher. However, Abu Qir Fertilizers and Misr Fertilizers Production experienced declines, with the former falling by 2.7% and the latter by 2.6%.
These declines were a result of a further 33% cut in gas supplies notified by Egypt to its fertilizer producers, reflecting the country's efforts to reduce reliance on expensive LNG imports.
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