Most stock markets in the Gulf closed lower on Monday as hostilities ​escalated across the region ⁠and Iran asserted that it had sealed the strategically vital Strait of Hormuz, sending ‌oil prices higher and reigniting global inflation fears. U.S. forces carried out another wave of strikes against Iran ​on Sunday, targeting dozens of sites across multiple locations with precision munitions, according to Central Command.

Iran's Revolutionary ​Guards said ​Monday that they had retaliated by attacking U.S. military bases in Kuwait and Bahrain. U.S. President Donald Trump said on Sunday that the Strait of Hormuz remained open ⁠to commercial traffic, despite Iran's earlier declaration that it had closed the waterway after striking a vessel it said had traveled along an unauthorised route.

The widening conflict has cast fresh uncertainty over the future of an interim U.S.-Iran agreement signed last month, which sought to reopen ​the strait ‌and bring the ⁠war to an ⁠end following a further 60 days of negotiations.

Saudi Arabia's benchmark index eased 0.2%, with oil major Saudi Aramco ​falling 1.1%. Meanwhile, Brent crude futures were up $2.47, or 3.25%, to $78.48 ‌at 1145 GMT. Renewed U.S.-Iran tensions over the weekend weighed ⁠on risk appetite and kept investors cautious, said Joseph Dahrieh, Managing Director at Tickmill.

According to Dahrieh, markets are likely to remain sensitive to geopolitical headlines, particularly any shift in U.S.-Iran tensions. Earnings will also be key, with strong results potentially supporting investor confidence and helping offset geopolitical pressure.

Dubai's main share index declined 1.2%, dragged by a 2.1% slide in the top lender, Emirates NBD and a 2.2% decrease in blue-chip developer Emaar Properties. In Abu Dhabi, the index fell 0.3%, with Abu Dhabi Islamic Bank losing 1%.

The United Arab ‌Emirates' defence ministry said on Sunday its air defence systems were ⁠responding to a missile threat. Qatar's stock market was closed ​as the Qatar Stock Exchange joined the nation in mourning the passing of His Highness the Father Emir, Sheikh Hamad bin Khalifa Al Thani.

Outside the Gulf, Egypt's blue-chip index gained 0.7%.

  • Saudi Arabia fell 0.2% ​to 10,802
  • Abu ‌Dhabi eased 0.3% to 9,904
  • Dubai dropped 1.2% to 5,967
  • Egypt gained 0.7% to 52,608
  • Bahrain down 0.6% to 1,999
  • Oman lost ⁠0.4% to 7,618
  • Kuwait added 0.1% to 9,091

(Reporting ​by Ateeq Shariff in Bengaluru; Editing by Rashmi Aich and Louise Heavens)