DUBAI: Most stock markets in the Gulf ended lower on Sunday after Russia and Belarus extended military drills north of Ukraine, dashing Western hopes that diplomacy might resolve the crisis.

The decision to extend military exercises was taken because of increased military activity near the borders of Russia and Belarus and an escalation of the situation in the eastern Ukrainian region of Donbass, the Belarus ministry said in a statement.

Saudi Arabia’s benchmark index fell 0.1%, as most of the stocks on the index were in negative territory including SABIC Agri-Nutrient.

However, the index’s losses were limited by gains at Al Rajhi Bank, which concluded 5.9% higher after the lender announced board’s proposal to increase capital to 40 billion riyals ($10.66 billion) by issuing bonus shares.

Separately, Nahdi Medical Co, Saudi Arabia’s market leader in retail pharmacy, on Sunday announced its intention to list on the local bourse by selling 30% of its shares, joining a spate of new initial public offerings in the kingdom.

The Qatari index dropped 0.5%, hit by a 1% fall in the Gulf’s biggest lender Qatar National Bank.

Crude prices, a key catalyst for the Gulf’s financial markets, ended the week mixed on Friday as investors weighed a potential supply disruption resulting from the Russia-Ukraine crisis against the prospect of increased Iranian oil exports.

Outside the Gulf, Egypt’s blue-chip index declined 1.4%, dragged down by losses across the board.

SAUDI ARABIA rose 1.1% to 9,473

QATAR lost 0.5% to 12,668

EGYPT lost 1.4% to 11,371

BAHRAIN was up 0.2% to 1,930

OMAN down 0.1% to 4,088

KUWAIT dropped 0.7% to 8,217.