Mideast Stocks: Major Gulf markets fall on regional tensions

Mideast Stocks: Major Gulf markets fall on regional tensions

Major stock markets in the Gulf fell in early trade on Wednesday on rising tensions in the region, although rising oil prices provided some support.

U.S., Qatari and Egyptian mediators prepared a diplomatic push to bridge differences between Israel and Hamas on a ceasefire plan for Gaza, after the Palestinian group responded to a proposal for an extended pause in fighting and hostage releases.

Traders have been following the situation in the Middle East, especially attacks on shipping by Iranian-backed Houthi rebels in the crucial Red Sea that have disrupted traffic through the Suez Canal, the fastest sea route between Asia and Europe and one that carries nearly 12% of global trade.

Houthis said on Tuesday they had fired missiles at two vessels in the Red Sea, causing damage to the ships.

Saudi Arabia's benchmark index dropped 0.2%, hit by a 1% fall in oil giant Saudi Aramco.

On the other hand, Savola Group advanced more than 5%, after announcing plans to distribute its entire 34.52% stake in regional dairy firm Almarai to its eligible shareholders.

The deal will be preceded by a 6-billion-riyal ($1.60-billion) rights issue that will help strengthen Savola's position, including paying off debt and enabling distribution of shares of Almarai, the biggest dairy firm in the Middle East.

Shares of Almarai were down 4%.

The Qatari benchmark eased 0.2%, hit by a 1.9% fall in the Gulf's biggest lender Qatar National Bank.

Dubai's main share index lost 0.2%, with toll operator Salik Co dropping 1.2%.

In Abu Dhabi, the index gained 0.2%.

Oil prices - which fuel the Gulf's economy - rose for a third day after U.S. crude inventories grew less than expected and a cut in the forecast for output growth in the U.S., the world's biggest producer, eased concerns about potential oversupply.