Stock markets in the United Arab Emirates closed higher on Friday, with ​Dubai leading ⁠regional gains after stronger-than-expected earnings from the country's three largest ‌lenders lifted banking shares and supported broader sentiment, even as investors remained ​cautious amid the Iran war.

Dubai's main index gained 0.7%, snapping two sessions' losses ​with top ​lender Emirates NBD Bank increasing 2%, while state-run utility firm Dubai Electricity and Water Authority advanced.

Emirates NBD said ⁠on Thursday its profit for the first quarter rose 3% to 6.4 billion dirhams ($1.74 billion).

The Dubai index logged a 2.2% decline, its first weekly loss after five positive sessions, while ​Abu ‌Dhabi recorded a ⁠1.3% weekly fall, ⁠according to data compiled by LSEG.

Abu Dhabi Commercial Bank recorded a ​37% hike in first quarter net profit ‌to 3.36 billion dirhams, while ⁠Q1 operating income jumped 18% year-on-year.

The banking sector's performance reinforced confidence in the underlying strength of the domestic economy, encouraging selective buying and providing broader support to UAE equities, said George Pavel, general manager at Naga.com Middle East.

"However, sentiment could remain cautious amid persistent geopolitical risks in the region".

Oil prices - a catalyst for the Gulf's financial market - declined on ‌Friday after a Pakistani government source said Iranian Foreign ⁠Minister Abbas Araqchi was expected to ​arrive in Islamabad on Friday night with a small team and peace talks with the U.S. were likely to take place.

Brent ​crude was ‌down 0.9% at $104.16 a barrel by 1151 ⁠GMT. ($1 = 3.6730 UAE dirham)

(Reporting ​by Mohd Edrees in Bengaluru, Editing by Louise Heavens)