Gulf markets trade cautiously as US-Iran conflict escalates

Gulf stock markets were little changed on Sunday as investors monitored a sharp escalation in hostilities between the United States and Iran, with renewed military exchanges and fresh disruptions to shipping in the Strait of Hormuz tempering market sentiment.

The latest round of fighting followed heavy missile and drone strikes exchanged by both sides, prompting US President Donald Trump to declare the ceasefire over while indicating that negotiations could still resume. The conflict intensified after Iran announced it had again closed the Strait of Hormuz, saying it had fired a warning shot at a vessel travelling on an unauthorised route before later reporting that it had disabled a second ship.

Saudi Arabia's benchmark Tadawul All Share Index (.TASI) rose 0.1% to 10,819, supported by a 0.2% gain in Saudi Aramco. Separately, sources said the kingdom was studying an expansion of its crude oil pipeline to the Red Sea coast, a move that could allow Saudi Arabia and potentially neighbouring producers to transport more oil without relying on the Strait of Hormuz.

Qatar's main index (.QSI) also advanced 0.1% to 10,103, with Industries Qatar climbing 0.6%. The gains came as the country announced the death of its former emir, who played a central role in Qatar's emergence as a regional power.

Elsewhere, Egypt's benchmark EGX30 index slipped 0.1% to 52,256 after central bank data showed the country's current account deficit widened to $5.1 billion in the January-March quarter from $2.3 billion in the corresponding period a year earlier. Shares of Talaat Moustafa Group Holding declined 0.6%.

Among other regional markets, Bahrain's index edged up 0.1% to 2,011, Oman's benchmark gained 0.1% to 7,652, while Kuwait's premier market index eased 0.1% to 9,082.