Most stock markets in the Gulf recovered from early losses to end higher on Sunday, despite U.S. strikes on Iranian nuclear sites and investors’ eye on the conflict’s economic impact. U.S. forces struck Iran’s three main nuclear sites late on Saturday, and President Donald Trump warned Tehran it would face more devastating attacks if it does not agree to peace.
In Qatar, the index concluded 0.2% higher, helped by a 2.6% rise in telecoms firm Ooredoo and a 1.2% increase in Qatar Gas Transport.
“It is admittedly a bit surprising to see regional equities shrugging off the U.S. strikes on Iran with relative ease, with opening losses having pared relatively rapidly,” said Michael Brown, Senior Research Strategist at Pepperstone.
Brown said that the markets had already discounted the probability of a U.S. attack, and investors anticipated a swifter resolution to the conflict following the attacks.
The Gulf market is focused on whether the conflict spreads to other nations in the region, with there being no sign of that happening right now, he added.
Bahrain and Kuwait, home to U.S. bases, made preparations on Sunday for the possibility of the conflict spreading to their territory, with Bahrain urging drivers to avoid main roads and Kuwait establishing shelters in a ministries complex. Kuwait’s premier index reversed early losses to finish 0.4% higher, while Bahrain’s main index added 0.3%.
The Omani share index was up 0.4%. Jaap Meijer, head of research at Arqaam Capital, said he expected limited downside potential, as investors will likely capitalize on dips, especially in stocks that have been undervalued or stand to gain from rising oil prices.
Gulf economies remain insulated, supported by stable oil flows, robust sovereign wealth funds and diversification efforts, making their equities appealing for income investors, added Meijer.
Saudi Arabia’s benchmark index, however, gave up early gains to close 0.3% lower, hit by a 1.2% fall in Al Rajhi Bank.
Recently listed Prince Alwaleed Bin Talal-backed airline Flynas tumbled more than 4%. Outside the Gulf, Egypt’s blue-chip index advanced 2.7%, as almost all its constituents were in positive territory including Commercial International Bank, which was up 1.5%.
According to Erkin Kamran – CEO of Traze – U.S. involvement might lead to a more contained conflict, as its military superiority could dictate the course of events, potentially minimizing collateral damage and prompting Iran to capitulate due to its weakened retaliatory capacity.
SAUDI ARABIA fell 0.3% to 10,574
QATAR gained 0.2% to 10,280
EGYPT up 2.7% to 31,056
BAHRAIN added 0.3% to 1,880
OMAN was up 0.4% to 4,525
KUWAIT rose 0.4% to 8,651
(Reporting by Ateeq Shariff in Bengaluru; Editing by Andrew Cawthorne)
Reuters
