Mideast Stocks: Gulf stocks fall as Gaza hospital blast heightens fears of wider conflict

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Stock markets in the Gulf ended lower on Wednesday as tensions escalated in the region following a Gaza hospital explosion, sparking fears of a widening Middle East conflict.

Hundreds of Palestinians were killed in the blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other and that prompted protests across the Middle East. Jordan's foreign minister, Ayman Safadi, cancelled a summit his country was to host in Amman with U.S. President Joe Biden and the Egyptian and Palestinian leaders.

Saudi Arabia's benchmark index dropped 0.2%, with Saudi Telecom Company losing 2.4%, while Sahara International Petrochemical Co tumbled 6.7%. The petrochemical maker reported a quarterly net profit of 233.1 million riyals ($62.15 million), down from 774.4 million riyals year ago.

Dubai's main share index declined 1.4%, falling for a fifth consecutive session, dragged down by a 3.5% slide in Emaar Properties and a 2.5% decline in top lender Emirates NBD.

The Dubai bourse recorded another round of price corrections in reaction to the increased geopolitical risks in the Middle East, said Milad Azar, Market Analyst at XTB MENA. "However, caution could dominate and the main index could continue to see downside risks."

In Abu Dhabi, the index retreated 0.7%. Oil prices - which support the Gulf region's economy - traded at around two-week highs, driven by concerns over the Middle East and data showing a fall in crude stocks. OPEC+ is not planning to take any immediate action after Iran's foreign minister called on OPEC to impose an oil embargo and other sanctions on Israel, Reuters reported on Wednesday, citing two sources from the producer group. The Qatari benchmark finished 0.8% lower, hit by a 2.7% fall in Qatar Islamic Bank.

Outside the Gulf, Egyt's blue-chip index edged up 0.2% to close at a record high, helped by 2.6% gain in E-finance For Digital and Financial Investments.