Most Gulf markets fall on geopolitics, weak oil

Most stock markets in the Gulf ended lower on Tuesday amid rising geopolitical tensions in the region, while retreating oil prices added to the pressure.

Israel said commando and paratroop units launched raids into Lebanon on Tuesday as part of a “limited” ground incursion, while Iran-backed Hezbollah said it had fired a barrage of missiles into Israel, including at its spy agency near Tel Aviv.

The raids by Israeli troops in southern Lebanon that began overnight went only a short distance over the border, an Israeli security official said, adding that no direct clashes with Hezbollah fighters were reported.

Hezbollah’s media relations chief Mohammad Afif denied Israel’s claim its forces had entered Lebanon.

Dubai’s main share index dropped 0.6 per cent, weighed down by a 2.3 per cent fall in blue-chip developer Emaar Properties and a 2 per cent decline in utility Dubai Electricity and Water Authority.

In Abu Dhabi, the index was down 0.2 per cent.

Oil prices – a catalyst for the Gulf’s financial markets – edged lower as a stronger supply outlook and tepid global demand growth outweighed fears over escalating conflict in the Middle East and its impact on crude exports from the region.

Saudi Arabia’s benchmark index closed 0.2 per cent higher, with aluminium products manufacturer Al Taiseer Group gaining 0.2 per cent

Meanwhile, Federal Reserve Chair Jerome Powell indicated on Monday the US central bank would likely stick with quarter-percentage-point interest rate cuts moving forward and was not “in a hurry” after new data boosted confidence in economic growth and consumer spending.

The Qatari index added 0.2 per cent, helped by a 0.3 per cent rise in the Gulf’s biggest lender Qatar National Bank.

Outside the Gulf, Egypt’s blue-chip index advanced 0.9 per cent, with Commercial International Bank finishing 2.2 per cent higher.

A forum set up by Egypt’s president began discussing on Monday a possible shift in the country’s subsidy programme towards paying cash directly instead of offering food products at reduced prices, a system many economists say could be more efficient.