Qatar index sees biggest fall in about 6 years
UAE halts stock markets for two days after Iran strikes
Oil jumps as Iran conflict escalates, disrupts shipping
Budget airline flynas extends rout
Updates with closing prices, analysts' comments
By Ateeq Shariff
March 2 (Reuters) - Qatar's stock market plunged on Monday while the UAE suspended trading for two days, an early sign of economic disruption across the region as the Gulf grapples with Iran's retaliatory missile and drone strikes.
U.S. and Israeli strikes on Saturday - and Iranian retaliation - sent shockwaves worldwide through sectors from shipping to air travel to oil, amid warnings of rising energy costs and disruption to business in the Gulf, a strategic waterway and global trade hub.
Israel has continued airstrikes on Iran and expanded its assault to include attacks on Iran-backed Hezbollah militants in Lebanon on Monday. Tehran said it had launched a new wave of missiles after the killing of Supreme Leader Ali Khamenei.
The UAE Capital Markets Authority said the Abu Dhabi Securities Exchange and Dubai Financial Market would remain shut on March 2 and March 3, citing its supervisory and regulatory role over the country's capital markets.
In Qatar, the benchmark index .QSI - which was closed for a bank holiday on Sunday - dropped 4.3%, its biggest fall since March 2020. The country's markets are open from Sunday to Thursday. The Gulf's biggest lender by assets, Qatar National Bank QNBK.QA, fell 4.8% - marking its biggest intraday fall since December 2022.
Qatar Islamic Bank QISB.QA declined 4.6%. HSBC cut its target price for the Sharia-compliant lender to 28.4 riyals ($7.79) from 29.4 riyals.
Elsewhere, maritime and logistics company Qatar Navigation QNNC.QA tumbled 5.6% and LNG shipping company Qatar Gas Transport QGTS.QA retreated 6.7%.
Kuwait's Index .BKP, which resumed trading after suspension on Sunday citing "exceptional circumstances", trimmed early losses to 1.9% from 3.6%, with National Bank Of Kuwait NBKK.KW losing 3.7%.
Market sentiment is likely to remain highly sensitive to regional geopolitical developments, with tensions driving near-term price moves. However, strong regional fundamentals and the relatively limited impact seen over the weekend may help cushion losses and cap downside, said Daniel Takieddine Co-founder and CEO, Sky Links Capital Group.
Saudi Arabia's benchmark index .TASI finished flat in a choppy trade, a day after falling more than 2%.
Among fallers, budget airline flynas 4264.SE tumbled 6.4%, to become the heaviest faller on the index.
However, oil giant Saudi Aramco 2222.SE advanced 1.5%, extending gains from the previous session, when it rose 3.4%.
Oil prices jumped 7% to their highest levels in months on Monday as Iran and Israel stepped up attacks in the Middle East, damaging tankers and disrupting shipments from the key producing region.
Qatar halted production of liquefied natural gas on Monday and Saudi Arabia shut its biggest domestic oil refinery after a drone strike, Reuters reported citing a source, as Israeli and U.S. strikes and Iranian retaliation triggered precautionary shutdowns of oil and gas facilities across the Middle East.
Saudi stocks stabilized and may recover, supported by the energy sector as oil prices rise, with other sectors potentially remaining resilient. A sharper rebound - and spillover gains across the region - would be more likely if geopolitical risks ease quickly and the physical impact stays limited, said Takieddine.
Muscat's index .MSX30 climbed 1.1%, while Bahrain stocks .BAX eased 0.2%.
The decline could persist if regional tensions intensify. However, because the sell-off is largely driven by geopolitical risk, markets could rebound quickly if tensions ease, said Joseph Dahrieh, Managing Director at Tickmill.
Outside the Gulf, Egypt's blue-chip index .EGX30 fell 0.6%.
($1 = 3.6445 Qatar riyals)
(Reporting by Ateeq Shariff in Bengaluru; Editing by Mrigank Dhaniwala, Christopher Cushing and Timothy Heritage)
((AteeqUr.Shariff@thomsonreuters.com; +918061822788))
