Saudi and Egyptian Stocks Under Pressure from US-Iran Conflict; Dubai Suspends Trading in Line with Regulator Decision

Riyadh | EcoPulse24

Saudi and Egyptian financial markets experienced significant declines as US-Iran military escalation entered a new phase, marking the first direct test of the region's financial vulnerability to widening conflict and its effects on energy, trade, and supply chains. The Dubai Financial Market announced a two-session trading suspension in compliance with a UAE regulatory authority decision.

The Saudi main index closed down 2.2%, its biggest daily loss since April, erasing year-to-date gains. Broad-based selling drove the decline, but Aramco shares rose 3.4% on expectations of higher oil prices at the Asian market open, partially offsetting losses. Aramco accounts for about 16% of the index's weighting, providing some support amid a wave of risk aversion.

In Egypt, the main index fell 2.5%, continuing its downward trend since mid-February, with losses exceeding 8% over that period. The Egyptian pound weakened to around 48.8 to the dollar, its lowest level since mid-2025, as regional risks and capital outflows weighed on the currency.

Egypt also faces pressure beyond financial markets. Gas supplies from Israel were halted after military strikes, prompting Cairo to accelerate LNG imports and purchase additional volumes ahead of peak summer demand. Egypt previously received about 1 billion cubic feet per day of Israeli gas, adding strain to its energy bill and external balance.

Regionally, Oman and Bahrain markets declined, while Kuwait suspended trading as a precaution. The Dubai Financial Market, referencing a UAE Securities and Commodities Authority announcement, suspended trading on Monday, March 2, 2026, and Tuesday, March 3, 2026, in line with the regulator's decision. Investors were advised to monitor official notices for further updates.

These moves reflect some Gulf markets shifting to direct risk management to contain volatility and prevent panic selling, while others continue trading to gradually price in risks through liquidity.

The decisive factor now is energy markets. Any sharp, sustained rise in oil prices could intensify global inflationary pressures and shift monetary policy expectations in major economies, affecting investor appetite for emerging and regional markets.

EcoPulse24 Analysis:
Dubai and Kuwait's trading suspensions versus continued trading in Saudi Arabia reveal different crisis management strategies among Gulf markets. Saudi Arabia benefits from energy sector support, while Egypt faces dual pressures from currency and energy disruptions. The direction of markets in the coming days will depend on the persistence of escalation and its actual impact on oil, gas flows, and shipping. Prolonged disruption could trigger deeper risk repricing, while rapid containment could enable a gradual recovery in liquidity and investor confidence.