TLDR
- Saudi Arabia’s benchmark fell as Al Rajhi Bank and Saudi Aramco shares moved lower Tuesday.
- Dubai and Abu Dhabi markets gained as property and transport stocks supported early trading.
- Brent crude dropped despite Houthi threats to block Saudi shipping routes and energy supplies.
- Investors tracked possible US-Iran mediation while doubts remained over wider regional escalation risks Tuesday.
- The US dollar held near a one-week high as Treasury yields remained elevated globally.
Gulf stock markets moved in different directions on Tuesday as investors tracked possible US-Iran mediation alongside fresh security risks in the Red Sea. Saudi Arabia’s benchmark index fell, while Dubai and Abu Dhabi shares posted modest gains during early trading.
The mixed performance came as Yemen’s Iran-aligned Houthis threatened a naval blockade of Saudi Arabia. The warning raised concerns about shipping routes, energy supplies and regional trade, even as Tehran and Washington showed interest in renewed diplomatic efforts.
Saudi Stocks Fall as Banks and Aramco Weaken
Saudi Arabia’s benchmark index dropped 0.3%, led by declines in major listed companies. Al Rajhi Bank fell 1.6%, while Saudi Aramco lost 0.5% as lower oil prices weighed on market sentiment.
Saudi Arabia rejected claims from the Houthis that the kingdom had imposed a siege on Yemen. The Saudi government condemned the allegations after the group announced plans for a maritime blockade targeting the kingdom.
Dubai’s main index gained 0.3% as Emaar Properties rose 1.3% and toll-road operator Salik advanced 1.6%. Abu Dhabi’s benchmark increased 0.5%, supported by gains across selected large-cap stocks.
The different moves across Gulf markets reflected varied exposure to banking, property and energy companies. Investors also monitored regional security developments that could affect shipping activity and crude oil flows.
Oil Prices Fall Despite Shipping Threats
Brent crude futures declined 1.1% to $88.26 per barrel by 0630 GMT. Oil prices moved lower despite the Houthi threat, as traders also considered the possibility of talks aimed at reducing regional tensions.
Iran said mediators had presented new proposals, although officials provided no details about their content. Reports of a possible ceasefire plan offered some relief, but markets remained cautious because the security situation could change quickly.
Rodrigo Catril, senior currency strategist at National Australia Bank, said, “There is the hope for easing in a little bit of tensions and we’ll hit a pause button at some stage. It’s all still very volatile.”
Catril added, “We have to wait and see how it develops. We need to see whether this escalates.” The comments reflected continued doubt over whether diplomatic efforts could prevent a wider conflict.
Dollar Holds Near One-Week High
The US dollar index remained steady at 100.96, near its highest level since July 15. The dollar traded around 162.50 yen, while the euro held near $1.1415 and the British pound stood at $1.3434.
US Treasury yields also remained elevated as traders assessed whether higher energy costs could increase inflation pressure. The benchmark 10-year Treasury yield traded at 4.5937%, while the 30-year yield stayed above 5%.
The New Zealand dollar rose 0.4% to $0.5860 after strong inflation data supported expectations for further rate increases. The Australian dollar edged higher to $0.7001 as currency markets continued to track energy prices and Middle East diplomacy.
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