Gulf stocks slip as oil slides on U.S.–Iran talks, Saudi market leads declines

Most Gulf equity markets closed lower on Thursday, weighed down by a sharp drop in oil prices after the United States and Iran agreed to hold talks in Oman, denting risk appetite across the region.

Brent crude, a key barometer for Gulf markets, fell 2.2% to $67.93 a barrel by 1300 GMT, sliding more than $2 on the day as investors priced in reduced near term geopolitical risk.

Saudi Arabia’s benchmark index fell 1.3% to 11,189, snapping a three session winning streak and marking its first weekly decline in four weeks. The index ended the week down 1.8%, as profit taking set in after three consecutive weekly gains.

Losses in Riyadh were broad based, with materials, IT and real estate stocks all retreating. Saudi Arabian Mining slid 5.4%, while Saudi National Bank, the kingdom’s largest lender by assets, dropped 2.7%. Bank Albilad bucked the trend, rising 0.8% following the release of higher full year net profit a day earlier.

“Market sentiment shifted to a risk off mode, influenced by the mood in U.S. and global markets, alongside weakness in commodities including oil,” said Daniel Takieddine, chief executive of Sky Links Capital Group.

He added that while investors were awaiting further fourth quarter earnings to potentially revive momentum, geopolitical developments and global caution had temporarily weighed on sentiment.

In Qatar, the benchmark index eased 0.3% to 11,355, with most stocks closing lower. Qatar National Bank fell 0.6%, while Gulf International Services declined 1.2%.

Abu Dhabi’s main index edged up 0.1% to 10,547, as gains in select stocks offset losses in utilities, healthcare and consumer staples. National Bank of Umm al Qaiwain rose 3.2% after reporting a 15% increase in full year net profit, while Abu Dhabi National Energy Company fell 1%.

Dubai continued to outperform the region, with its benchmark index rising 0.1% to 6,675, extending gains for a fourth consecutive session and hitting its highest level since 2006. Emirates NBD gained 1.5%, while Emaar Development advanced 2.8%.

Elsewhere in the Gulf, Kuwait’s index slipped 0.5% to 9,266, Bahrain’s market ended flat at 2,060, and Oman’s benchmark rose 0.7% to 6,425.

Separate data showed the UAE’s non oil private sector recorded its fastest growth in new business in nearly two years in January, driven by a sharp increase in new orders, according to a survey released on Wednesday.

Outside the Gulf, Egypt’s blue chip index rose 0.2% to 49,739, supported by an 8.1% jump in Ibnsina Pharma and a 2.2% gain in Fawry for Banking Technology.