Mideast Stocks: Most Gulf Bourses Gain on US-Iran Negotiation Hopes; Regional Risks Cap Gains

Most Gulf bourses ended higher on Monday, supported by hopes that renewed U.S.-Iran negotiations could ease regional tensions. Mediators have presented Iran with a proposal to de-escalate its conflict with the U.S., including a 10-day ceasefire aimed at exploring ways to revive an interim agreement reached last month, a senior Iranian official told Reuters on Monday. 

Most regional markets had closed before Yemen's Iran-aligned Houthis said they were imposing a naval blockade on Saudi Arabia, opening a new front in the conflict and widening risks to global energy supplies and trade beyond the Gulf. Other regional risks remained elevated. Kuwait and Bahrain reported fresh Iranian strikes, while the U.S. embassy in Manama warned that Iran may target unspecified locations in the Bahraini capital and urged Americans to remain vigilant.

Kuwait's Foreign Ministry condemned what it called an Iranian attack on a power and water desalination facility. Greek shipping company Dynacom Tankers said two of its managed vessels were hit by projectiles of unknown origin on Monday while sailing off the coast of Oman. Saudi Arabia's benchmark index added 0.2%, helped by a 0.7% rise in Al Rajhi Bank. 

Since the war began, the kingdom has rerouted more than 70% of its usual daily crude exports to the Red Sea port of Yanbu. Shipments from Yanbu have averaged 4 million barrels per day in recent weeks, compared with about 973,000 bpd a year earlier. Dubai's main share index fell 0.3%, weighed down by a 1.1% drop in blue-chip developer Emaar Properties and a 3.5% decline in budget carrier Air Arabia. In Abu Dhabi, the index slipped 0.3%. Sentiment could remain cautious as investors assess developments, their impact on local economies, and volatility in oil markets, said Daniel Takieddine, co-founder and CEO, Sky Links Capital Group.

 However, reports of efforts to restart regional diplomacy could fuel some optimism. At the same time, earnings season may influence market direction. Strong results could highlight the resilience of local economies, offset external pressures, and boost investor confidence, added Takieddine. 

Qatar's benchmark index advanced 1.3%, recovering from a 1.5% decline in the previous session, supported by a 0.3% gain in Qatar Islamic Bank. Elsewhere, Oman's index plunged 3.4%. Outside the Gulf, Egypt's blue-chip index added 1.1%. Saudi Arabia rose 0.2% to 10,742 

Abu Dhabi lost 0.3% to 9,751 

Dubai down 0.3% to 5,796 

Qatar gained 1.3% to 10,084

Egypt added 1.1% to 53,126

Bahrain closed up 0.2% to 1,965 

Oman plunged 3.4% to 9,044 

Kuwait increased 0.1% to 9,044