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Major stock markets in the Gulf eased in early trade on Wednesday, as the killing of Hamas leader Ismail Haniyeh in Iran fuelled tensions in the region.

Haniyeh was assassinated in the early hours of the morning in Iran, the Palestinian militant group said on Wednesday, drawing fears of wider escalation in a region shaken by Israel’s war in Gaza and a worsening conflict in Lebanon.

The assassination, which came less than 24 hours after Israel claimed to have killed the Hezbollah commander it said was behind a deadly strike in the Israeli-occupied Golan Heights, appeared to set back chances of any imminent ceasefire agreement in Gaza.

Saudi Arabia’s benchmark index fell 0.3%, hit by a 4% slide in aluminium products manufacturer Al Taiseer Group and a 0.6% decrease in Al Rajhi Bank.

Dubai’s main share index eased 0.1%, with blue-chip developer Emaar Properties falling 1.2%. In Abu Dhabi, the index dropped 0.5%, with conglomerate International Holding losing 0.2%.

Oil futures rebounded from 7-week lows after the assassination, but prices stayed under pressure from concerns about weak Chinese demand.

Most Gulf markets in black on Fed rate-cut optimism

The Qatari benchmark was down 0.2%, weighed down by a 1.9% decline in Qatar Navigation retreating 1.9%.

On the other hand, telecoms firm Ooredoo added 0.8% after reporting a rise in second-quarter profit, which limited the declines in the benchmark.

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