DUBAI: Most stock markets in the Gulf ended lower on Wednesday after Iran’s ballistic missile strike on Israel stoked fears of a wider regional conflict, with the Saudi index falling the most.

Saudi Arabia’s benchmark index dropped 1.7%, weighed down by a 4% decline in aluminium products manufacturer Al Taiseer Group and a 2.9% decrease in Al Rajhi Bank .

Hezbollah said its fighters were engaging Israeli forces inside Lebanon on Wednesday, reporting ground clashes for the first time since Israel began pushing into its northern neighbour in a campaign to hammer the Iran-backed armed group.

The Israeli military said regular infantry and armoured units were joining its ground operations in Lebanon, a day after Israel was attacked by Iran in a strike that raised fears the oil-producing Middle East could be engulfed in a wider conflict.