Stock markets in the Gulf ended mixed on Tuesday as new U.S. tariffs threatened to escalate global trade tensions, while Saudi Aramco's disappointing earnings weighed on investor sentiment.
U.S. President Donald Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%, launching new trade conflicts with the top three U.S. trading partners.
Saudi Arabia's benchmark index (.TASI), opens new tab dropped 1.6%, weighed by a 2.2% fall in Aramco (2222.SE), opens new tab after the oil giant reported a drop in annual profit and signalled it will slash its dividend payouts by nearly a third this year to $85.4 billion.
The sharply lower dividends could also mean fewer funds for the kingdom, which directly owns 81.5% of Aramco, as it races to complete several mammoth projects and possibly faces a wider budget deficit.
The firm also declared $200 million in performance-linked dividends to be paid in the first quarter of 2025, a steep decline from the nearly $10.8 billion declared for each quarter of 2024.
The kingdom's energy index (.TENI), opens new tab was down 2.2%.
Aramco's results fell short of expectations and significantly impacted the energy sector, said George Pavel, general manager at trading platform Naga.com.
"External factors further weighed on market sentiment, with oil prices continuing to decline following OPEC's decision to increase production," Pavel said.
In Abu Dhabi, the index (.FTFADGI), opens new tab finished 0.3% higher, helped by a 1.5% gain in petrochemical firm Borouge (BOROUGE.AD), opens new tab after the announcement of its merger with Borealis to form the world's fourth largest polyolefins firm by production capacity.
The merged entity, Borouge Group International, will combine two joint ventures: Borealis, which is 75% owned by Austria's OMV (OMVV.VI), opens new tab and 25% by Abu Dhabi National Oil Company, and Borouge, which is 54% owned by ADNOC and 36% by Borealis.
Dubai's main share index (.DFMGI), opens new tab gained 0.5%, led by a 2.2% rise in blue-chip developer Emaar Properties (EMAR.DU), opens new tab.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab dropped 0.7%, hit by a 1.1% dip in Commercial International Bank (COMI.CA), opens new tab.
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