Most Gulf stock markets rose at the beginning of trading on Tuesday, supported by declining concerns about oil supplies and lower expectations for raising US interest rates in the near term, in addition to improving risk appetite in global markets.
Saudi stocks led the Gulf gains, as the main market index “TASI” rose by about 0.4 percent during early trading, supported by the rise of “Al Rajhi Bank” shares by 0.6 percent, and the rise of “Saudi Aramco” shares by 1 percent.
This came as data showed a recovery in Gulf oil flows - excluding Iran - to more than 81 percent of pre-war levels during September, led by a rise in Saudi exports.
Morale was also supported by lower expectations for a hike in US interest rates in October, after data showed that job growth in the United States slowed more than expected during September, with job estimates for the previous two months being lowered.
In the rest of the Gulf markets, the Qatar index rose by 0.2 percent, the Dubai index rose by 0.1 percent, while the Abu Dhabi index bucked the trend and fell by 0.1 percent.
Gulf markets are closely following US monetary policy expectations, given that most of the region's currencies are linked to the US dollar.
British construction sector activity continued to contract in September, but recorded the slowest pace of decline since January, with the severity of the decline in house building activity fading slightly, according to a sector survey released on Tuesday.
The Standard & Poor's Global Purchasing Managers' Index in the construction sector rose to the highest level in 8 months at 46.1 points in September, compared to 44.3 points in August, but it remained below the 50-point level that separates growth from contraction, continuing the contraction for the ninth month in a row since January 2025, according to Reuters.
Tim Moore, director of economics at Standard & Poor's Global Market Intelligence, said that total new orders remained relatively weak in September, with construction companies reporting a longer period of time needed to convert sales into actual work, as well as customers postponing their decisions on major projects.
The new orders index fell to 45.9 points, from 47.7 points, recording the lowest level in three months, amid a combination of weak demand, geopolitical tensions and high input costs.
On the other hand, input prices rose at the slowest pace since the outbreak of the war on Iran in February, but Moore ruled out a continuation of this slowdown in light of rising energy costs. Construction companies' expectations for future activity also fell to their weakest levels since May.
The latest official data showed that British construction sector production fell 1.0 percent year-on-year in the second quarter of 2026. House building remained the weakest sector in the index, followed by the civil engineering sector, while commercial activity recorded only a slight decline.
At the level of the economy as a whole, the Standard & Poor's Global Purchasing Managers' Index for all sectors, which includes services, manufacturing and construction, fell to 51.5 points in September, from 51.8 points in August, recording its lowest level in three months.
Oil prices reversed their direction during Tuesday's trading session and declined, as strong crude exports from the Middle East and the G7 withdrawal of emergency stocks contributed to allaying concerns about supply, but the ongoing security risks in the region limited the amount of decline.
Brent crude futures fell 83 cents, or 0.8 percent, to $99.49 per barrel by 0650 GMT, while US West Texas Intermediate crude futures fell $1, or 1.1 percent, to $88.43 per barrel.
Priyanka Sachdeva, head of market research at Philip Nova, said, according to Reuters: “Shipping data shows that crude oil exports from the region actually exceeded pre-war levels on several days during late September... Alternative routes and logistical adjustments, in some way, allowed producers to continue the flow of supplies despite the turmoil surrounding the Strait of Hormuz.”
She added: “However, it does not yet seem logical to consider this a complete return to normal conditions with regard to supplies... as there have been new attacks on oil tankers in the Strait of Hormuz region, and the number of incidents has increased over the past days. This means that although oil shipments continue to flow, the costs of transporting them, insuring them, shipping routes, and the associated security risks remain high.”
Data showed that oil flows from the Gulf region, excluding Iran, rose to more than 81 percent of pre-war levels in September, supported by a recovery in Saudi exports despite the escalation of Iranian attacks on shipping in the region, while Iranian exports fell to zero due to the American blockade.
ING analysts said in a note on Tuesday that while the market remains concerned about the potential for supply disruptions from the region, oil producers in the Gulf continue to adapt to the current situation.
They added: “Kuwait announced that it is producing at 75 percent of pre-war levels, while Saudi Arabia also reduced the official selling price of its Arab Light crude heading to Asia for November shipments, in an indication of an improved supply picture.”
In another step to calm concerns about supplies, the G7 countries agreed on Friday to withdraw 100 million barrels of diesel and crude oil from emergency reserves, and pledged to refrain from imposing restrictions on energy exports after pressure from US President Donald Trump.
