Gulf shares slide after US and Iran exchange strikes, rattling regional markets

Gulf stock markets dropped across the board on September 2 after the United States launched airstrikes against Iranian targets overnight, prompting retaliatory missile and drone attacks from Tehran. The escalation, centered around strategic flashpoints in the Middle East, sent a familiar chill through regional equity markets that have been whipsawed by US-Iran tensions for months.

Dubai’s main index fell 0.6% in early trading. Qatar’s benchmark slipped 0.5%. Saudi Arabia’s Tadawul index dipped 0.3%.

What happened overnight

US forces conducted strikes on Iranian targets during the night of September 1-2. Iran’s Revolutionary Guards responded with ballistic missile attacks on a US base in Jordan and drone strikes targeting a US facility in Bahrain.

Much of the underlying tension centers on control of the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world’s oil supply passes daily.

The damage across Gulf exchanges

In Dubai, heavyweights bore the brunt. Emaar Properties fell 1.3%. Salik, the city’s toll-gate operator, dropped 1.1%.

Qatar’s decline was led by Industries Qatar, which fell 1.2%, and Qatar National Bank, the region’s largest lender by assets, which slid 0.5%.

Saudi Arabia’s Tadawul saw its losses concentrated in utilities, healthcare, and materials sectors. The 0.3% dip was the mildest of the three major Gulf benchmarks.

Prior US-Iran confrontations over the summer months produced regional index declines ranging from 0.3% to 1.5%. The September 2 sell-off sits comfortably within that range.

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