Mideast Stocks: Gulf Bourses Slip As Iran-US Escalation Dents Risk Appetite

The Dubai stock market led Gulf stocks lower on Monday as renewed military action between the U.S. and Iran near the Strait of Hormuz weighed on risk appetite. American forces struck two Iranian launchers on Larak Island in the Strait of Hormuz on Sunday, prompting Tehran to retaliate with attacks on U.S. forces stationed in Jordan. 

Iran also said it struck a tanker transiting through the strategic waterway. The United Arab Emirates said its air force engaged a drone over its territorial waters that had originated from Iran, according to a defence ministry statement on Monday. 

Dubai's main index fell 0.8%, with most constituents trading lower. Emirates NBD Bank, the emirate's largest lender, dropped 2.3%, while developer Emaar Properties declined 1.8%. 

Abu Dhabi's benchmark lost 0.4%, pressured by a 3.3% fall in Abu Dhabi Islamic Bank and a 1.7% decline in Aldar Properties. Conglomerate Alpha Dhabi Holding shed 1.2%. Earlier on Monday, Alpha Dhabi said it doubled its commitment to $1 billion for its private-credit joint venture with Abu Dhabi wealth fund Mubadala Investment. 

Qatar's benchmark slipped 0.6%, with most sectors in negative territory. Qatar Fuel Company fell 6.7%, while Qatar National Bank, the region's largest lender, lost 0.6%. Elsewhere, Qatar's economy shrank 7% in the first quarter of 2026 from a year earlier, dragged down by a sharp decline in energy production caused by the ongoing Middle East conflict, official data showed. 

Saudi Arabia's benchmark index was down 0.3% as real estate and information technology led the broad-based declines. Developer Umm Al Qura for Development fell 4.9%, while Arabian Internet and Communications Services declined 3.7%. 

"Looking ahead, sentiment could lean toward caution as investors monitor any potential escalations and shipping conditions in the Strait of Hormuz," said George Pavel, general manager at Naga.com Middle East. "Stock markets in the region could come under pressure if tensions between the U.S. and Iran deteriorate further. New incidents could overshadow current diplomatic efforts," he added. 

Outside the Gulf, Egypt's blue-chip index eased 0.1%, pressured by finance, healthcare and communications stocks. Commercial International Bank fell 1.3%, while E-finance slipped 1.9%. 

SAUDI ARABIA down 0.3% to 11,127 

DUBAI dropped 0.8% to 5,836 

ABU DHABI down 0.4% to 10,007 

QATAR fell 0.6% to 9,807 

KUWAIT down 0.2% to 9,288 

BAHRAIN lost 0.2% to 1,936 

OMAN gained 0.4% to 7,604 

EGYPT down 0.1% to 54,866

($1 = 3.7544 riyals)