Most Gulf stock markets ​edged higher on Tuesday, led ⁠by financial shares, after President Donald Trump said the U.S.-Israeli war on Iran could end soon even as ‌ongoing mutual threats prolonged tensions.

Dubai's main share index jumped more than 3%, led by an 8.1% surge in top lender Emirates ​NBD and a 6.3% leap in sharia-compliant lender Dubai Islamic Bank.

Among other gainers, Dubai Financial Market, which operates the emirate's stock exchange, ​jumped 8.2%.

However, ​the gains were limited by a 2.3% fall in blue-chip developer Emaar Properties amid ongoing caution over the Middle East conflict.

In Abu Dhabi, the index gained 0.9%, helped by a 5.1% rise in Abu Dhabi ⁠Islamic Bank and an 8.5% surge in Abu Dhabi Commercial Bank . In steps aimed at stabilizing markets, the UAE Securities and Commodities Authority said last week that Abu Dhabi's ADX and Dubai's DFM exchanges suspended trading on March 2 and 3, while the two exchanges said they would temporarily set a 5% floor on securities declines.

The Qatari index advanced 1.5%, with ​the Gulf's biggest lender ‌Qatar National Bank gaining ⁠1.3% and petrochemical maker Industries ⁠Qatar up 2.6%.

CDS SPREADS NARROWING

The cost of insuring against default on sovereign debt issued by several countries in the region ​fell on Tuesday, with five-year CDS spreads tightening after rising sharply on Monday.

Bahrain's five-year ‌CDS tightened 21 basis points (bps) to 249 bps, Saudi Arabia's fell 6 ⁠bps to 82 bps, while Egypt's and Dubai's both narrowed 11 bps, to 357 bps and 61 bps, respectively, S&P Global Market Intelligence data showed.

Saudi Arabia's benchmark index added 0.6%, with Al Rajhi Bank rising 1.9%.

Investors have been adjusting their portfolios away from the UAE market as they reassess its relatively low risk premium, especially after the strong rally seen earlier this year before the conflict, said Chiro Ghosh, head of research at SICO bank.

At the same time, Saudi Arabia is viewed as less exposed than other Gulf markets to risks linked to the Strait of Hormuz, with investors also considering the possibility that parts of the supply chain could be rerouted ‌through the Red Sea to reduce disruption.

Saudi stocks also appear relatively attractive ⁠on valuation grounds. The index posted its weakest annual performance in a decade last ​year and has only made a modest start this year, prompting some investors to see room for recovery.

Oil major Saudi Aramco retreated 1.8% after reporting a 12% drop in annual profit mainly due to lower crude prices.

Oil prices fell on Tuesday ​after hitting a ‌more than three-year high in the previous session, following Trump's comment.

Kuwait's was up 1.1%, while ⁠Bahrain's slipped 0.2%.

Outside the Gulf, Egypt's blue-chip index ​climbed 2.5%.

(Reporting by Ateeq Shariff in Bengaluru; Editing by Ronojoy Mazumdar, Janane Venkatraman and Andrei Khalip)