Mideast Stocks: Gulf markets subdued on geopolitical strife

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Most stock markets in the Gulf were subdued on Tuesday amid tensions in the region as Lebanon's Hezbollah launched deepest attack into Israel since Gaza war.

Iran-backed Hezbollah group said on Tuesday it had launched a drone attack against Israeli military bases north of the city of Acre. The Israeli military said it had no knowledge of any of its facilities being hit by Hezbollah, but had said earlier it intercepted two "aerial targets" off Israel's northern coast.

Saudi Arabia's benchmark index gave up early gains to close 0.2% lower, with oil giant Saudi Aramco losing 0.2%. Crude prices - which fuels the Gulf economy - slipped after a short-lived boost from stronger economic data out of Europe as the market weighed the potential fallout from any fresh U.S. sanctions on Iran's oil exports. Dubai's main share index finished flat.

The Dubai stock market continued to see downside risks although it stabilised to a certain extent, said Milad Azar Market analyst at XTB MENA.

"A resurgence in geopolitical risks could further weigh on the market."

In Abu Dhabi, the index eased 0.3%, with the country's biggest lender First Abu Dhabi Bank declining 1.7%. Banks and finance companies in the United Arab Emirates may defer personal and car loan instalments for six months to help deal with the repercussions of last week's storm, the UAE central bank said on Monday.

The Qatari benchmark, bucking the trend, gained 0.5%. Investors this week are waiting for the release of U.S. gross domestic product figures and March personal consumption expenditure data - the Fed's preferred inflation gauge - to assess the trajectory of monetary policy.

Most Gulf currencies are pegged to the dollar and any monetary policy change in the United States is usually mimicked by Saudi Arabia, the United Arab Emirates and Qatar.

Outside the Gulf, Egypt's blue chip index retreated 4.9%, as most of its constituents were in negative territory including Commercial International Bank, which was down 4.5%.