• Stock market index hits an 11-month low
• Abu Dhabi experiences a downturn prior to late buying
• Persistent selling pressure on UAE markets

The stock index in Dubai dropped to its lowest level in 11 months on Monday, continuing a downward trend as negative investor sentiment intensified following an Iranian strike on the emirate’s airport. The escalating regional tensions also contributed to a more subdued sell-off across other Gulf markets.

Diving by 3.5 percent, Dubai’s index settled at 5,235 points, marking its lowest close since late April 2025. Abu Dhabi’s index also recorded a similar decline before notable late-session buying mitigated most of its daily losses, finishing down 0.2 percent.

Since the US and Israel initiated strikes against Iran on February 28, triggering a resurgence in conflict, the Dubai and Abu Dhabi benchmark indices have plummeted by 19.5 and 9.5 percent, respectively.

Iran’s response included closing the Strait of Hormuz, a critical route for approximately one-fifth of the world’s oil supply, and launching attacks on civil and military sites in Middle Eastern countries hosting US military forces, such as the UAE, Qatar, and Bahrain.

The decline in the UAE stock market was widespread; however, blue-chip companies in the banking and real estate sectors faced the most significant strain. Emaar Properties and Aldar Properties, leading real estate developers in Dubai and Abu Dhabi, saw their stock prices drop by 4.9 and 3.5 percent, respectively.

These two companies alone experienced a combined market valuation decrease of $21 billion this month, as investors express concerns that the ongoing conflict with Iran might diminish demand for both residential and commercial properties in the UAE, based on calculations from AGBI.

Banking stocks also fell, with Emirates NBD, Dubai’s largest lender, decreasing by 1.7 percent, Dubai Islamic Bank dropping 3 percent, and Abu Dhabi Islamic Bank plunging 4.9 percent.

“Any stock related to the population in the UAE is struggling,” stated a trader based in the Gulf, who requested anonymity.

The trader indicated that selling pressure in the UAE markets shows no signs of abating. “The situation doesn’t look promising,” they added. “We need a sustained period of peace. Although Iran isn’t directly attacking the UAE, there are daily disruptions [from missiles or drones] affecting daily life and putting pressure on the UAE government. Today, it was Dubai airport.”

The negative market sentiment is so pronounced that few investors are inclined to make purchases at the current stock prices. “At this stage, you’d be trying to catch a falling knife,” the trader remarked. “No asset managers are eager to increase their market exposure under these circumstances.”

In contrast, Saudi Arabia’s index remained relatively stable, rising by 0.3 percent as of 11:13 GMT. The nation is likely to be less impacted by the closure of the Strait of Hormuz since its state oil enterprise, Saudi Aramco, can send up to two-thirds of its usual crude output through a pipeline leading to the Red Sea.

On the other hand, Qatar, Kuwait, and Bahrain rely completely on exports through the narrow waterway, as noted by Farouk Soussa, Goldman Sachs’ MENA economist, in a research report.

Goldman Sachs predicts that if the conflict with Iran continues at its present intensity until the end of April, oil production from Saudi Arabia and the UAE would see reductions of 12 and 16 percent. In contrast, production levels for Qatar, Bahrain, and Kuwait could drop by more than 25 percent.

The anticipated declines, along with an expected contraction of 2 to 6 percent in the non-oil economies of Gulf countries, could lead to substantial year-over-year losses in real GDP across the region by 2026.

According to Goldman estimates, Qatar and Kuwait could each see their real GDP decrease by 14 percent this year, while declines of 3 and 5 percent are projected for Saudi Arabia and the UAE, respectively.

Such an uncertain economic landscape has further impacted other Gulf markets, resulting in a 1.2 percent decline in Qatar’s index, which reached a new nine-month low. Kuwait’s index, which had shown slight gains earlier this month, also declined, falling by 0.4 percent.