UAE stock exchanges reopened on Wednesday after a two-day closure prompted by Iranian missile and drone strikes on the Gulf nation, which targeted civilian and commercial areas including Dubai's international airport, hotels, and Amazon data centers [1]. As trading resumed, Dubai's benchmark index dropped 4.9%, marking its worst day since May 2022, while Abu Dhabi's main index fell more than 3%, its sharpest intraday decline since August. The Nasdaq UAE 20 was down 4.3% [1]. State-owned bank Emirates NBD led losses in Dubai, falling 5.2%, while Abu Dhabi's Al Buhaira National Insurance Company and Umm Al Qaiwain General Investments declined 9.6% and 8.7% respectively. Air Arabia was last seen trading 5% lower, impacted by thousands of flight cancellations due to airspace closures [1]. Both exchanges temporarily adjusted their lower price limit thresholds for securities to -5% before reopening [1].
Analysts at Citi noted that the escalation in Middle East conflict could have 'a profound and potentially long-lasting impact on the MENA region.' They identified Dubai's Emaar and Abu Dhabi real estate developer Aldar as most at risk for earnings-per-share growth, while lenders NBK and ENBD faced the biggest downside risk in the banking sector. Citi also warned that the perceived equity risk premium for MENA stocks, especially those well owned by foreign shareholders or considered valuation rich, could rise materially [1].
The sell-off in the Gulf followed days of losses in global stock indexes. On Wednesday morning, Asian markets resumed their sell-off, while European stocks opened in positive territory, breaking two days of broad losses. U.S. stock futures pointed to a negative open after all three major averages ended Tuesday's session in the red [1].
Meanwhile, investors are considering how the U.K. equity market might respond to the escalating conflict in the Middle East. The FTSE 100, often seen as defensive due to its composition of pharmaceutical, utility, tobacco, and consumer goods stocks, fell by less than its major continental European peers following news of the strikes on Iran [2]. The index includes companies likely to benefit from Middle East turmoil, such as defense contractor BAE Systems, suppliers like Babcock International, Rolls-Royce, Melrose Industries, and oil majors BP and Shell. Mining stocks such as Rio Tinto, Glencore, Anglo American, and Antofagasta are also well represented and could benefit from higher commodity prices caused by supply chain disruptions [2].
The FTSE 250, the U.K. mid-cap index, contains defense industry suppliers and oil and gas plays, including Qinetiq Group, Avon Technologies, Hunting, Senior, Ithaca Energy, Harbour Energy, and Clarkson, which may benefit from maritime disruption [2]. Sterling typically weakens during such crises, as investors seek safety in the U.S. dollar, Swiss franc, and yen. Because FTSE 100 companies earn around three-quarters of their revenues in currencies other than the pound, sterling weakness tends to be positive for the index [2].
CONCLUSION
The reopening of UAE stock exchanges after Iranian strikes triggered sharp sell-offs, with major indexes and leading companies posting significant declines. Analysts warn of lasting risks to MENA equities, particularly in real estate and banking. In contrast, the U.K. market's defensive composition and currency dynamics position the FTSE 100 and FTSE 250 as relative safe havens, with certain sectors poised to benefit from ongoing Middle East turmoil.