UAE equities surged on Thursday as investor sentiment improved following signs of easing tensions between the United States and Iran, helping Dubai post its strongest advance in months. However, growing expectations that the U.S. Federal Reserve could maintain a tougher stance on interest rates prevented a broader rally across Gulf markets.
Markets drew support from a newly announced agreement between Washington and Tehran aimed at halting hostilities that had disrupted regional trade and energy flows. While the deal has injected optimism into financial markets, analysts noted that investors remain focused on how negotiations unfold in the coming weeks.
The reopening of the Strait of Hormuz has also eased concerns over shipping disruptions, offering relief to sectors tied to trade, logistics and energy exports. A smoother flow of goods and crude shipments is expected to support economic activity across the region.
At the same time, Gulf investors are keeping a close eye on the Federal Reserve. Recent comments from U.S. policymakers reinforced expectations that borrowing costs could remain elevated as officials continue their fight against inflation. Because most Gulf currencies are pegged to the U.S. dollar, shifts in American monetary policy often ripple through regional markets.
Dubai emerged as the standout performer, with its benchmark index jumping 2.5% to 6,270 points, recovering to levels last seen before geopolitical tensions intensified earlier this year. Property heavyweight Emaar Properties posted solid gains, while Emirates NBD rallied sharply after announcing the completion of a majority stake acquisition in India’s RBL Bank through a capital infusion valued at roughly $2.75 billion.
In Abu Dhabi, the main index advanced 1.2%, supported by strong performances from banking, healthcare and property stocks. First Abu Dhabi Bank recorded notable gains, while Aldar Properties climbed to its highest level in more than three months.
Saudi Arabia’s stock market edged higher, with strength in real estate, healthcare and materials shares offsetting weakness elsewhere. Mining giant Ma’aden moved higher, while Saudi National Bank also posted gains. Saudi Aramco slipped slightly after its chairman revealed the company is evaluating plans to expand global storage capacity following recent supply disruptions linked to the conflict around the Strait of Hormuz.
Elsewhere, Qatar’s market underperformed regional peers, with most major shares ending lower. Industries Qatar and Qatar National Bank both declined as investors booked profits.
**Regional Market Snapshot**
* Saudi Arabia: +0.1% at 11,121
* Dubai: +2.5% at 6,270
* Abu Dhabi: +1.2% at 10,113
* Qatar: -0.6% at 10,511
* Kuwait: -0.6% at 9,221
* Bahrain: +0.6% at 2,028
* Oman: -0.7% at 7,582
* Egypt: Market closed
The contrasting performance across Gulf exchanges reflected a market balancing renewed geopolitical optimism against concerns that higher U.S. interest rates could continue to weigh on liquidity and investment flows.
