Gulf region stock markets experienced sharp declines on Sunday as geopolitical tensions escalated following retaliatory actions by Iran against targets linked to the United States and Israel. Boursa Kuwait took the unusual step of suspending trading indefinitely, citing “exceptional circumstances” amid rising uncertainty and risk aversion among investors.
Most major Gulf equity markets slumped as risk-off sentiment spread. In Saudi Arabia, the benchmark Tadawul index fell, with prominent stocks such as Al Rajhi Bank, Saudi National Bank and budget airline Flynas all suffering losses. At the same time, shares of Saudi Aramco rose as oil prices strengthened on concerns over supply disruptions.
The market turmoil followed a series of reported explosions over the Dubai and Doha areas, prompting closures at major regional airports including Dubai’s, and contributing to significant disruption in global aviation. Witnesses described the events as among the biggest disruptions to travel in recent years.
Analysts raised forecasts for Brent crude oil prices to around $100 a barrel, up from earlier estimates near $80, reflecting fears that a protracted conflict could disrupt energy flows especially through strategic chokepoints like the Strait of Hormuz. Continued volatility and a heightened geopolitical risk premium are expected to keep pressure on regional markets.
Investors are closely monitoring developments, as any further escalation or economic damage could deepen losses in Gulf equities and influence asset classes such as commodities, currencies and safe-haven investments.
