MUSCAT : The downturn comes after Israel and the US launched attacks on Iran, prompting Tehran to retaliate with strikes on Israel and nearby US targets in Arab Gulf cities. Witnesses reported blasts in the Dubai area and over Doha for a second consecutive day on Sunday, heightening concerns across financial and aviation sectors.
Iran’s retaliation forced major regional airports, including Dubai, to suspend operations, marking one of the worst episodes of aviation disruption in years. The escalating situation has sent shockwaves through regional markets, which are often seen as early indicators of how investors assess the broader impact on oil prices, safe-haven assets and currencies.
In Oman, the Muscat Stock Exchange’s benchmark MSX30 index trimmed earlier losses to close down 1.5 per cent after sliding more than 3 per cent in a broad-based sell-off. Heavyweight OQ Base Industries declined 2.2 per cent, contributing to the downward pressure.
Elsewhere in the region, Saudi Arabia’s benchmark Tadawul All Share Index (TASI) plunged 4.6 per cent in early trading, on track for its biggest intraday fall since April. Among the major decliners were Al Rajhi Bank, down 3.3 per cent; Saudi National Bank, which fell 4.5 per cent; and low-cost carrier flynas, also down 4.5 per cent. In contrast, oil giant Saudi Aramco advanced 2.3 per cent, buoyed by rising crude price expectations.
Saudi authorities said on Saturday that Iran had attacked Riyadh and the kingdom’s eastern region, further intensifying investor anxiety.
In Kuwait, Boursa Kuwait suspended trading as a precautionary measure. Bahrain’s stock index fell 0.6 per cent, while Qatar’s stock exchange remained closed due to a bank holiday.
Market analysts warn that Gulf equities face heightened correction risks as geopolitical tensions fuel a risk-off sentiment. Hani Abuagla, Senior Market Analyst at XTB MENA, said rising tensions are pressuring prices and expectations across regional markets. He added that investors will closely monitor developments, and any further escalation or damage to the real economy could deepen the ongoing sell-off.
Concerns are also mounting over potential disruptions to shipping traffic through the Strait of Hormuz, a critical global energy chokepoint. Any interruption could weigh further on market sentiment and disrupt operations across multiple sectors.
Reflecting the heightened risk premium, Barclays on Saturday raised its forecast for Brent crude oil to around $100 per barrel, up from $80 just a day earlier, signalling expectations of tighter supply and increased volatility in energy markets.
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