MIDEAST STOCKS-Most Gulf markets retreat on heightened regional tensions

By Ateeq Shariff Oct 2 (Reuters) – Most stock markets in the Gulf ended lower on Wednesday after Iran’s ballistic missile strike on Israel stoked fears of a wider regional conflict, with the Saudi index falling the most. Saudi Arabia’s benchmark index dropped 1.7%, weighed down by a 4% decline in aluminium products manufacturer Al Taiseer Group and a 2.9% decrease in Al Rajhi Bank . Hezbollah said its fighters were engaging Israeli forces inside Lebanon on Wednesday, reporting ground clashes for the first time since Israel began pushing into its northern neighbour in a campaign to hammer the Iran-backed armed group. The Israeli military said regular infantry and armoured units were joining its ground operations in Lebanon, a day after Israel was attacked by Iran in a strike that raised fears the oil-producing Middle East could be engulfed in a wider conflict. An Israeli team commander was killed in Lebanon, the Israeli military said. Dubai’s main share index dropped 0.8%, hit by a 1.7% fall in blue-chip developer Emaar Properties. Among other losers, budget airline Air Arabia was down 0.7%. According to George Pavel, general manager at Capex.com, the market may continue its downward trajectory if current conditions persist. In Abu Dhabi, the index retreated 1.1%. On the other hand, oil prices – a catalyst for the Gulf’s financial markets – climbed more than 3% as Israel and the U.S. vowed retribution over Iran’s biggest ever direct attack on its regional adversary, firing more than 180 ballistic missiles. Outside the Gulf, Egypt’s blue-chip index lost 1.7% with most of its constituents in negative territory, including Talaat Mostafa Holding, which was down 3.5%. SAUDI ARABIA slid 1.7% to 12,044 ABU DHABI fell 1.1% to 9,307 DUBAI dropped 0.8% to 4,440 QATAR declined 0.6% to 10,566 EGYPT down 1.7% to 31,333 BAHRAIN closed flat at 2,008 OMAN lost 0.4% to 4,678 KUWAIT down 1.2% to 7,630 (Reporting by Ateeq Shariff in Bengaluru; Editing by Jan Harvey)

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