Bank and real estate stocks affected
Tadawul and Aramco drop 0.9%
Gulf stock markets slipped in early trading on Wednesday, extending declines as the Iran-Israel conflict made investors more risk averse.
Dubai’s index was down 0.8 percent before midday local time, poised for its fifth drop in six sessions since it hit a 17-year high on June 10. However, selling pressure has been relatively muted across Gulf bourses since Israel’s attack last Friday.
“Middle East investors and those investing in Middle East stocks from other regions have grown accustomed to geopolitics,” said Marwan Haddad, managing director and Mena equities lead at Azimut Group, which has $110 billion of assets under management.
“If Iran and Israel can find a face-saving solution, Gulf markets will react positively.”
Financial and real estate stocks led the declines in Dubai, with its biggest bank by assets Emirates NBD dropping 0.7 percent and Emaar Properties down 0.4 percent. Budget carrier Air Arabia was another notable loser, falling 1.9 percent.
Nevertheless, Dubai’s benchmark is up 34 percent over the past 12 months to be among the best performers globally.
“A direct war between Israel and Iran was always the biggest geopolitical concern for foreign investors,” said Haddad.
“Markets were more concerned about Iran’s response to an Israeli attack than the Israeli attack itself, which had long been anticipated. The worst-case scenario was that the US would join Israel’s offensive and that would cause Iran to retaliate by attacking US military bases in the Middle East.
“So far, the US has intervened directly only in defending Israel, so the conflict is currently only a tit-for-tat between Iran and Israel.
“Gulf markets are relatively comfortable with that scenario although if there is no ceasefire, markets will weaken steadily because the potential for escalation will remain.”
Institutional activity was again subdued in Dubai. The most traded stocks by value were small and mid-cap companies that are mostly the preserve of retail investors.
Among these, Amlak Finance rose 1.3 percent and Salama Islamic Arab Insurance company jumped 7.4 percent – possibly on expectations for increased demand and higher premiums for marine and commercial cover should the Iran-Israel conflict intensify.
Abu Dhabi’s benchmark fell in initial trading, but recovered to be up 0.1 percent at midday local time.
Heavyweights including Adnoc Logistics & Services and Abu Dhabi Ports Co declined, while the government-backed tech business Presight AI rose 2.7 percent.
Saudi Arabia’s benchmark index dropped 0.9 percent, extending declines as Aramco also fell 0.9 percent.
Brent crude was trading at about $76 per barrel, below the 2024 average of $81 despite a sharp rebound over the past month.
Kuwait’s premier market index dipped 0.9 percent to trim its 2025 gains to 9.5 percent while Qatar’s benchmark was near-flat.
