Most major stock markets in the Gulf fell in early trade on Tuesday on heightened tensions in the region, although the Dubai index bucked the trend.

The Iran-aligned Houthis continued their attacks on shipping lanes in the Red Sea and Bab al-Mandab Strait, with at least four more vessels hit by drone and missile strikes since Friday.

Houthi said on Monday they had attacked the Rubymar cargo vessel in the Gulf of Aden which was at risk of sinking, raising the stakes in their campaign to disrupt global shipping in solidarity with Palestinians in the Gaza war.

Saudi Arabia’s benchmark index dropped 0.2%, on course to snap a 13-day winning streak, hit by a 0.9% slide in Al Rajhi Bank.

However, the index’s losses were limited by a 3% rise in Saudi Telecom Co after reporting an annual net profit of 13.30 billion riyals ($8.00 billion), up from 12.71 billion riyals a year earlier.

The telecoms firm also proposed a special dividend of 1 riyal per share for 2023, alongside a regular annual payout of 0.40 riyal per share.

Saudi index at 18-month high leads Gulf market gains

In Qatar, the index lost 0.3%, with Qatar Islamic Bank losing 0.7% and Qatar National Bank, the Gulf’s biggest lender, retreating 0.5%.

Oil prices - a catalyst for the Gulf’s financial markets - were broadly steady, hovering close to three-week highs on heightened Middle East tensions and recovering China demand.

The Abu Dhabi index eased 0.2%, weighed down by a 1.1% fall in the United Arab Emirates’ biggest lender First Abu Dhabi Bank.

Dubai’s main share index edged 0.1% higher, helped by a 3.2% rise in Commercial Bank of Dubai.