Gulf stocks move cautiously as regional concerns continue

Major Gulf stock markets moved limitedly in early trading on Monday, with tensions in the Middle East keeping investors on edge, in light of the explosion of an oil tanker in the Strait of Hormuz and continued uncertainty about reopening the waterway.

Brent crude futures fell by 2.08 percent to $107.57 per barrel, by 06:19 GMT, after closing on Friday at their highest levels since May 19, with investors taking profits, following US President Donald Trump’s exemption of Russia from sanctions and customs duties, in a move that could lead to an increase in Russian fuel exports.

In Saudi Arabia, the main index fell by 0.3 percent, affected by the decline in the shares of the “Saudi Arabian Mining Company” (Ma’aden) by 1.7 percent, and the decline in the shares of “National Bank” by 0.8 percent.

Saudi Aramco shares fell by 0.3 percent.

In Dubai, the main index stabilized, despite the rise in Dubai Investments shares by 2.4 percent. The group intends to offer a 20 percent stake in DIB Holding Company, which owns the Dubai Investment Park real estate activity, in the first initial public offering in the Emirates this year, and one of the few offerings in the Gulf region since the outbreak of the war with Iran.

In Abu Dhabi, the index fell by 0.2 percent, while the Qatari index fell by 0.5 percent, trading at its lowest levels in more than six years.

A study conducted by the Ifo Institute, published on Monday, showed that the German industrial sector has lost about half a million jobs since 2019, as manufacturers face increasing competitive pressures.

According to the study, the number of workers in the German industrial sector was 496,000 fewer people at the end of 2025, compared to the beginning of 2019, a decrease of 7.1 percent.

In contrast, more than 2.2 million jobs were created in the service sector, especially in the fields of health and social services, as well as in public administration.

“Germany is witnessing an accelerating structural transformation,” said Joachim Ragnitz, Director General of the Ifo Institute. The irony is that the same sectors that have so far maintained our prosperity are witnessing a contraction.”

He added that the new jobs are not being created, for the most part, in sectors where Germany has particularly high productivity and innovation, warning that this could slow the potential for future economic growth.

The study indicated that employment is declining in almost all industrial sectors, likely as a result of decreased competitiveness, especially vis-à-vis China.

In detail, the automobile industry and the companies that supply it reduced the number of jobs by 123,500 jobs, a decrease of 13 percent, while metal product manufacturers shed 115,600 jobs, and the mechanical engineering sector lost 64,500 jobs.

According to Ragnitz's calculations, these three sectors represent about 60 percent of the total jobs that have been cut.

French bond yields rose on Monday, and the difference between them and German bond yields widened, after the widespread turmoil that France witnessed over the weekend highlighted the difficulties the government faces in reducing the large fiscal deficit in the second largest economy in the euro zone.

France, which is suffering from weak growth and worsening public debt, witnessed some of the worst unrest in years over the weekend. Thousands of people were arrested, while stores were looted or damaged, following protests against high prices and the decline in the level of public services, according to Reuters.

The French ten-year bond yield rose by 6 basis points to 4.84 percent, while the corresponding German bond yield, which is a benchmark for the euro zone, settled at 3.41 percent.

London Stock Exchange Group data showed that the two-year French bond yield briefly rose by 10 basis points, before settling at a rise of two basis points at 3.57 percent.

Concerns about the volume of French borrowing had pushed the ten-year bond yield to 4.99 percent in early October, before market movements calmed down last week.

Political maneuvering, with the presidential elections scheduled for next year approaching, may further complicate the situation, with potential repercussions on the markets.

Jim Reed, global head of macroeconomic research at Deutsche Bank, said in a morning note that the turmoil “will not make international investors completely comfortable buying French Treasuries, so the limited gains made by French bonds over the past week or so will be tested today.”

He added, “France is indeed facing a difficult financial situation.” “With the 2027 elections approaching, the weekend’s events add a new layer of political risk to markets.”

Traders' interest is focused on whether the rise in French bond yields will spread to other countries in the euro zone that suffer from high debt levels, and Italy stands out as the first country worth monitoring. On Monday, the Italian ten-year bond yield rose by 4 basis points to 4.52 percent.

Developments in France also cast a shadow on the euro, which fell by between 0.1 and 0.2 percent against the dollar, the British pound, and the Japanese yen.

On the stock market, French stocks were likely to perform weaker than their counterparts in the region, as futures contracts for the French CAC 40 index of leading stocks fell by 0.8 percent, compared to a decline of 0.5 percent for futures contracts for leading stocks in the euro zone.