Gunfire in Hormuz Shatters Ceasefire Hopes, Gulf Stock Markets Tumble Together
- The main stock indexes in the Gulf region all closed lower on Wednesday. Trump's announcement of an indefinite extension of a ceasefire against Iran appeared powerless in the face of the brutal reality of continued blockades and skirmishes on the waters of the Strait of Hormuz. News of the prolonged ceasefire failed to boost regional risk appetite. Instead, the continued blockades by the US Navy of Iranian ports and coastlines—and Tehran’s characterization of these actions as acts of war—plunged the market into deeper uncertainty.
- The Dubai benchmark index led the declines, falling 1.1%, with most heavyweight stocks under pressure. Blue-chip developer Emaar Properties dropped 2.2%, and the largest local bank, Emirates NBD, slipped 1.8%. The Abu Dhabi index also fell by 0.8%. First Abu Dhabi Bank, the UAE’s biggest bank, tumbled 2.6%. Conglomerate Alpha Dhabi and real estate firm Aldar Properties declined by 1.4% and 1.8% respectively, despite the latter announcing a joint acquisition of the Masdar City project with Mubadala just on Tuesday.
- Saudi Arabia's key benchmark index closed lower for the fifth consecutive trading day, down another 0.9%, with almost all component stocks in the red. Both Al Rajhi Bank and ACWA Power fell by more than 2%, with oil giant Saudi Aramco being the only exception, edging up 0.4%—clearly benefitting from crude oil prices surging to $99.56 per barrel following reports of attacks in Hormuz. The Qatari market slipped 0.1%. Qatar National Bank, the region’s largest bank, led the declines, but Qatar Gas Transport Company bucked the trend, climbing 1.1% after reporting first-quarter net profit growth.
- The current paradox facing Gulf markets is that diplomatic signals of a ceasefire cannot offset the reality of shipping lane paralysis. News on Wednesday that at least three container ships were fired upon in the Strait of Hormuz completely extinguished faint hopes of a return to normal shipping operations. According to XTB MENA analysts, although geopolitical deadlock will continue to dampen sentiment in the short term, the upcoming earnings season could provide a buffer for market stabilization if strong results are delivered, combined with the robust fundamentals in the region.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Cryptocurrencies Turn Higher as Equities Change Course -- Market Talk
U.S. homebuilder confidence unexpectedly falls to a 14-year low, hit by both high interest rates and cost pressures
The Housing Market Index, jointly released by the National Association of Home Builders (NAHB) and Wells Fargo, fell by 3 points this month to 29, the lowest level since June 2012 and below the market expectation of 31. The sales sub-index dropped to 33, also a 14-year low; the index for expected sales over the next six months declined to its weakest level since November 2022; the index measuring potential buyer traffic fell to its lowest point since the onset of the COVID-19 pandemic.
Crypto prices
More
