Most Gulf stock markets closed lower on Sunday amid ongoing regional tensions and disruptions affecting key shipping routes, which contributed to cautious investor sentiment. Concerns over potential renewed U.S. military action further dampened hopes for a diplomatic resolution, according to George Pavel, general manager at Naga.com Middle East, who noted that traders were awaiting clear signs of progress in negotiations.

In Saudi Arabia, the benchmark Tadawul index trimmed earlier losses to finish 2.65 percent lower, after falling as much as 3.4 percent during the trading session. The main market recorded a turnover of 4.31 billion Saudi riyals (approximately $1.14 billion). Among the stocks traded, 30 advanced, 348 declined, and 35 remained unchanged. Concurrently, the parallel Nomu market fell 1.79 percent, closing at 21,043.74 points, with 12 stocks gaining and 61 losing ground. The MSCI Tadawul Index also declined by 2.29 percent to 1,280.94. Watani Iron Steel Co. was the strongest performer on the day, with its share price increasing by 6.37 percent to 2.67 riyals.

Elsewhere in the Gulf Cooperation Council (GCC), markets showed mixed results. Qatar’s benchmark index rebounded from early losses to end modestly higher by 0.1 percent at 8,615 points. Bahrain’s primary index slipped 0.2 percent to 1,848 points. Oman's market retreated 1.4 percent to 7,278 points, while Kuwait’s benchmark gained 0.5 percent to close at 8,768 points.

Beyond the Gulf region, Egypt's blue-chip index experienced its largest single-day decline since June 2025, plunging 3.6 percent as most constituent stocks ended the session in negative territory.

The recent market movements reflect mounting geopolitical uncertainty and logistical challenges that continue to weigh on investor confidence in the region’s financial markets.