Saudi Arabia's stock market ended lower on Sunday, as worries that the U.S. might take military action against Iran highlighted the risks that the region would be the most exposed to any Iranian retaliation.
Iran's Supreme Leader Ayatollah Ali Khamenei said on Sunday that any U.S. attack on Iran would turn into a regional conflict, according to state media, as tensions between Washington and Tehran escalated.
The U.S. has increased its naval presence in the Middle East after President Donald Trump repeatedly warned Iran he could intervene if it didn't agree to a nuclear deal or if it continued killing protesters.
Saudi Arabia's benchmark index dropped 1.9%, its biggest intraday fall since April, dragged down by a 9.5% slide in Saudi Arabian Mining Company.
Oil company Saudi Aramco retreated 2.4%.
The Saudi index had rallied more than 10% from January 7 through end-January after the country said it would fully open its financial markets to all foreign investors from February 1.
The Qatari index added 0.3%, helped by a 1.5% rise in Qatar National Bank, the Gulf's biggest lender by assets.
Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani met with top Iranian security official Ali Larijani in Tehran and reviewed efforts to de-escalate tensions in the region, Qatar's foreign ministry said on Saturday in a statement.
Outside the Gulf, Egypt's blue-chip index lost 0.3%. Saudi Arabia dropped 1.9% to 11,167 Qatar rose 0.3% to 11,340 Egypt lost 0.3% to 47,663 Bahrain added 0.2% to 2,047 Oman declined 1.3% to 6,247 Kuwait advanced 1.1% to 9,226
(Reporting by Ateeq Shariff in Bengaluru. Editing by Jane Merriman)
