Gulf stocks slide on rising regional tensions

Gulf stock markets ended the week to 23 October 2026 with widespread losses as investors reacted to escalating regional tensions. Benchmarks across Saudi Arabia, Qatar, Kuwait and Oman all closed lower for the week, reflecting increased risk aversion. The moves followed concerns about an expanding regional conflict after Houthi attacks in Saudi Arabia and rising threats to maritime security and energy supplies through the Strait of Hormuz.

The pressure on regional equities coincided with a more than 6% weekly rise in Brent crude (UKOUSD), which reached its highest closing level in about six months. Despite firmer oil prices, equity investors focused on geopolitical risks and the potential impact on trade and energy flows. The combination of security concerns and corporate news translated into marked weekly declines across the main Gulf indices.

The Saudi Tadawul All Share Index registered a 4.1% weekly decline, marking its eighth consecutive weekly loss and the largest weekly fall in more than two years. On Thursday, the index dropped 2.3%, closing at its lowest level since March 2021. Heavyweight stocks contributed to the weakness, with National Commercial Bank shares falling more than 5% and Aramco slipping 0.7% in that session.

The extended losing streak underscores sustained selling pressure in the Saudi market amid an environment of heightened uncertainty. The combination of regional security concerns and sensitivity to global energy dynamics weighed on sentiment, despite the concurrent rise in oil prices over the week.

The Qatari benchmark index declined 2.3% over the week, marking its sixth consecutive weekly retreat. The sustained slide highlights persistent caution among investors toward Qatari equities in the current geopolitical and economic backdrop. The losses added to the region-wide pattern of weakness, even as energy markets tightened.

In Kuwait, equity performance also softened, with the first market index falling 1.9% on a weekly basis and the main index down 3.6%. These declines reflected the broader risk-off tone in Gulf assets. Market participants balanced local corporate developments with regional tensions and the implications for investment flows.

Oman’s Muscat bourse recorded the deepest weekly drop among Gulf markets. Its main index fell 3.89% to close at 7,379 points. Trading was marked by broad investor caution that affected activity across multiple sectors.

The retreat in Muscat came alongside similar moves elsewhere in the region but stood out in percentage terms. The scale of the decline underscored how geopolitical developments and shifting risk appetite can quickly reshape performance across smaller Gulf markets.

Investor sentiment was pressured by multiple regional flashpoints. The period saw Houthi attacks in Saudi Arabia and an announcement by the Iranian Revolutionary Guard that it had targeted four ships accused of transporting oil illegally. These events increased concerns about the safety of shipping lanes and energy flows in and around the Strait of Hormuz.

At the same time, Gulf markets entered the third-quarter earnings season, which introduced additional stock-specific pressure. Some listed companies reported results that fell short of investor expectations, adding to the drag on indices already under strain from geopolitical tensions. The overlap of security risks, mixed earnings and rising oil prices framed a complex backdrop for Gulf equities during the week.