Gulf stock markets held steady on Sunday after the US struck three nuclear sites in Iran in overnight attacks, escalating the Israel-Iran war that threatens to disrupt energy supplies from the oil-rich region.
Saudi Arabia's Tadawul gave up early gains and its main index ended traded 0.34 per cent lower. Qatar's main index closed up 0.19 per cent, while the main market in Kuwait ended the session 1.81 per cent higher on Sunday.
Bahrain's bourse closed up 0.27 per cent, while the main index on the Muscat bourse reversed early losses to end 0.42 per cent higher.
"Markets are focused on whether the war spreads to other countries and there is no evidence of that as yet," Hasnain Malik, head of emerging and frontier market investment strategy at Tellimer, told The National. "The benign interpretation is that the US intervention will accelerate the end of the war. That, of course, remains to be seen."
Investor attention is now centred on the risk of Iranian retaliation, particularly towards US assets, regional energy infrastructure, and maritime routes like the Strait of Hormuz and the Red Sea, Iridium Advisor said in a note on Sunday morning.
"GCC investor sentiment will be shaped by rising geopolitical risk following US air strikes on Iranian nuclear sites," it said.
"While broad financial disruption appears unlikely, markets will monitor liquidity conditions. For now, the market impact will hinge more on the nature and timing of Tehran’s response than the strikes themselves."
Meanwhile, the Tel Aviv stock market also gained on Sunday, with the TA-125 index up 0.98 per cent and TA-35 up 0.75.
The US military bombed three nuclear sites in Iran, President Donald Trump said on Saturday night, calling the attacks a "spectacular military success".
"Iran's key nuclear enrichment facilities have been completely and totally obliterated," he said.
He also warned of the possibility of further attacks, saying there were "many targets left".
"Iran, the bully of the Middle East, must now make peace. If they do not, future attacks will be far greater and a lot easier."
Iran retaliated on Sunday morning with about 25 missiles, authorities said.
The war, which began on June 13 following air strikes by Israel on Tehran, has rattled investors.
The UAE markets ended higher last week, with the Dubai Financial Market up 1.5 per cent at the close of session and the Abu Dhabi Securities Exchange gaining 0.95 per cent at market close.
Global stocks ended last week on a mixed note, with both the S&P 500 and the Nasdaq composite ending the session on Friday lower, while the Dow Jones Industrial Average closed slightly higher.
In Europe, London's FTSE 100 closed 0.2 per cent lower, while Paris' CAC 40 gained 0.5 per cent. Frankfurt's DAX was up 1.3 per cent.
In Asia, Hong Kong’s Hang Seng index edged 1.3 per cent higher and Shanghai’s composite was down 0.07 per cent, with Japan’s Nikkei down 0.2 per cent.
