Most Gulf markets ended higher on Tuesday after Iran and Israel said they ​had halted attacks, ⁠though Tehran warned the truce would end if Israel kept striking Hezbollah in ‌Lebanon. The most direct clash between the two countries since April threatened to derail Washington's efforts to broker an ​end to the more than three-month-long war in the Middle East.

Most Gulf bourses had retreated in the ​previous session ​as renewed Israeli strikes on Iran and attacks in Lebanon undermined hopes for a near-term end to the war. U.S. President Donald Trump told Axios in an interview ⁠published Monday that he had warned Netanyahu that he could be left to fight alone if he resumed the war with Iran.

Saudi Arabia's benchmark index gained 1.3%, with the country's biggest lender by assets, Saudi National Bank, climbing 4.2%. Meanwhile, Brent crude futures were down $1.55, or 1.6%, ​at $92.70 a barrel ‌at 1012 GMT. Washington ⁠has been urging ⁠Tehran to reopen the Strait of Hormuz, which carried about a fifth of global oil supplies before ​U.S. and Israeli airstrikes on Iran in late February.

Dubai's main share ‌index advanced 0.9%, led by a 2% rise in ⁠top lender Emirates NBD. In Abu Dhabi, the index was up 0.8%. The easing regional geopolitical tensions and rising expectations of a diplomatic breakthrough have helped GCC stock markets rebound, but with conditions changing rapidly, investors are likely to remain cautious and volatility may persist despite the improvement in sentiment, said Daniel Takieddine, co-founder and CEO, Sky Links Capital Group.

The Qatari index - which declined more than 2% on Monday - rebounded 1.9%, buoyed by a 1.2% gain in the Gulf's biggest lender Qatar National Bank.

Outside the Gulf, Egypt's blue-chip index advanced ‌1%. Egypt's annual inflation rate is expected to have eased to 14.5% ⁠in May, pulled lower by favorable base effects, a Reuters ​poll showed on Monday, though analysts warn the respite will be short-lived as electricity price hikes and other pressures push prices higher in coming months.

  • Saudi Arabia rose 1.3% to 11,115
  • Abu Dhabi up 0.8% to ​9,561
  • Dubai gained 0.9% ‌to 5,785
  • Qatar advanced 1.9% to 10,282
  • Egypt rose 1% to 52,375
  • Bahrain was up 0.1% to 1,978
  • Oman added ⁠0.5% to 7,625
  • Kuwait increased 1.2% to 9,173

(Reporting ​by Ateeq Shariff in Bengaluru; Editing by Janane Venkatraman and Jonathan Ananda)