Stock markets across the Gulf declined sharply as escalating geopolitical tensions dampened investor sentiment and triggered sell-offs in key sectors.

Dubai’s main index dropped 2.1%, while Abu Dhabi fell 0.8% and Saudi Arabia’s benchmark index declined 0.9%, reflecting widespread caution among investors.

The downturn follows renewed tensions between the United States and Iran, including the seizure of a cargo ship and uncertainty over ceasefire negotiations.

Banking, real estate, and aviation stocks were among the hardest hit, as investors reassessed risk exposure in the region. Despite elevated oil prices—which typically support Gulf economies—markets remained under pressure.

From a business perspective, the decline highlights the sensitivity of regional markets to geopolitical developments. Volatility is expected to remain high until there is greater clarity on the political situation.

Looking ahead, analysts believe strong economic fundamentals, including sovereign reserves and government backing, could limit long-term downside risks.

Source : Reuters.