UAE stocks slide after missile detection, Abu Dhabi halts Iran trade
UAE markets fell after missiles were detected near its waters; Abu Dhabi suspended trade with Iran, rattling Gulf bourses.
Stock markets in the United Arab Emirates opened lower on Wednesday after the government reported detecting two ballistic missiles launched from Iran, an incident that has escalated regional tensions and prompted a sharp policy response from Abu Dhabi.
The UAE stated that the missiles, the first such event since a strike on Fujairah port in May, appeared to target maritime traffic and landed in the sea. Tehran's foreign ministry dismissed the allegation as "baseless."
In a swift move, Abu Dhabi announced the suspension of all trade activities, commercial exchanges, and financial transactions with Iran until further notice.
Analysts noted that the disruption to commercial shipping through the Strait of Hormuz remains significant, with disagreements persisting over maritime traffic conditions. For Gulf Cooperation Council economies, the strait's role as a vital route for regional energy exports makes the situation particularly acute, according to Ahmad Assiri, research strategist at Pepperstone. He added that the projectile incident, combined with the trade halt, has heightened concerns that regional tensions could spill into GCC territory.
Abu Dhabi's benchmark index fell 0.9%, with nearly all constituents trading lower. First Abu Dhabi Bank, the country's largest lender, dropped 1.4%, while blue-chip developer Aldar Properties lost 1.2%.
Dubai's benchmark index slipped 0.2%, with most sectors lower. Emirates NBD declined 1.5%, while Spinneys 1961 Holding fell 3%.
Elsewhere in the region, Qatar's benchmark index was little changed, as a 0.8% decline in Qatar International Islamic Bank offset a 1% gain in Industries Qatar. Saudi Arabia's benchmark eased 0.2%, weighed by materials, healthcare, and utilities shares. Saudi Arabian Mining Co lost 0.7% and Arab National Bank fell 0.9%, while Saudi Aramco and National Shipping Company of Saudi Arabia gained 0.4% and 1.2%, respectively.
Despite the tensions, Saudi Aramco resumed loading oil cargoes from inside the Strait of Hormuz last week, with more tankers waiting to load as the state energy giant offers spot heavy crude cargoes, according to shipping data and trade sources.