By Ateeq Shariff
Most major Gulf equity markets closed lower on Wednesday, as persistent uncertainty over the durability of the U.S.-Iran accord coupled with expectations of higher interest rates weighed on investor sentiment.
The two countries, which concluded a first round of negotiations in Switzerland on Monday, gave conflicting accounts of key elements of the framework agreement signed last week to end the war, including financial incentives for Iran, control of the Strait of Hormuz and Israel's parallel war in Lebanon.
U.S. President Donald Trump said on Tuesday that Iran had agreed to nuclear inspections into "infinity," while Tehran denied making any such concession, raising doubts about the viability of the fragile peace deal.
Saudi Arabia's benchmark index TADAWUL:TASI fell 0.3%, with Al Rajhi Bank TADAWUL:1120 losing 1.4%.
However, Umm Al Qura for Development and Construction Co TADAWUL:4325 surged 10% and Dar Al Arkan Real Estate Development Co TADAWUL:4300 advanced 5.8%.
The kingdom's real estate authority has begun accepting applications for foreign real estate ownership, it said in a statement on Tuesday, part of a push to attract foreign investment in the kingdom.
Dubai's main share index DFM:DFMGI edged 0.1% higher, helped by a 3.5% rise in toll operator Salik Company DFM:SALIK.
In Abu Dhabi, the index ADX:FADGI lost 0.3%.
Improving Middle East geopolitics may support GCC equities, helped by rising Strait of Hormuz traffic and stronger export flows despite lower oil prices. However, possible friction in U.S.-Iran nuclear talks could keep sentiment cautious and markets volatile, said Milad Azar, market analyst at XTB MENA.
The Qatari index QSE:GNRI retreated 0.8%, weighed down by a 1.8% slide in the region's biggest lender Qatar National Bank QSE:QNBK.
Markets are now pricing in three Federal Reserve rate hikes this year, a sharp shift from expectations of just one before last week's policy meeting, according to the CME FedWatch Tool.
Monetary policy shifts in the U.S. have a significant impact on Gulf markets, where most currencies are pegged to the dollar.
Outside the Gulf, Egypt's blue-chip index EGX:EGX30 was down 0.1%.
Saudi Arabia
TADAWUL:TASI fell 0.3% to 11,007
Abu Dhabi
ADX:FADGI down 0.3% to 9,993
Dubai
DFM:DFMGI added 0.1% to 6,112
Qatar
QSE:GNRI dropped 0.8% to 10,321
Egypt
EGX:EGX30 eased 0.1% to 51,711
Bahrain
BAHRAIN:BHBX rose 0.3% to 2,042
Oman
(.MSX30) gained 0.6% to 7,358
Kuwait
KSE:BOURSA lost 0.2% to 9,146