The ceasefire between Iran and Israel has brought relief to Gulf markets, with key indexes closing higher on Monday. Investors reacted positively to the easing of geopolitical tensions in the region and growing expectations of a rate cut by the US Federal Reserve. Al Rajhi Banking and Investment Corporation SJSC, Commercial International Bank Egypt (CIB), and Qatar National Bank were among the top performers.
The stabilization in geopolitical tensions and the optimistic outlook on US monetary policy provided a favorable backdrop for the trading session. In the UAE, stock markets experienced a ‘relief rally’, with the Dubai Financial Market (DFM) shooting to a new record high after a 3% gain by 11:15 AM. The DFM general index reached 5,576 points, surpassing the previous high of 5,438 points set on May 22.
The Abu Dhabi Securities Exchange (ADX) also posted gains, up by 2.12%, as investors welcomed the ceasefire deal.
Gulf markets react to ceasefire
Air Arabia led the way on the DFM with a 7% surge in its stock price, as airlines anticipate benefiting from reduced hostilities in the region ahead of the summer flying season.
A similar trend was observed with flynas stock on the Saudi Tadawul, which saw a 6% increase around the 11:30 AM mark. This marks a significant rebound after a turbulent period for the stock amid concerns over the Israel-Iran conflict. The Saudi Tadawul general index experienced a 1.77% surge.
Both DFM and ADX opened the week on a positive note despite heightened regional tensions following the US bombing of Iran’s nuclear facilities on Saturday. The stock of Abu Dhabi developer Aldar jumped by 8% after 90 minutes of trading, while banking heavyweights ADIB and ADCB saw significant gains, both up nearly 6%. The positive movement in UAE stock markets reflects a broader optimism among investors, buoyed by geopolitical developments that hint at a more stable regional outlook.
The ceasefire and the potential for a US rate cut have contributed to the improved sentiment in the Gulf markets.
