Saudi Tadawul jumps 3.43% as Tehran talks loom and regional risks mount

Key Facts

Saudi Arabia’s Tadawul index jumped 3.43% in Monday’s session, October 26, adding 323.28 points to close at 9,761.78 points, as Reuters linked gains in Gulf markets to hopes of easing tensions stirred by talks scheduled in Tehran. The talks were set to bring together Iranian, Saudi, Turkish and Pakistani officials. Reuters said this would be the first high-level contact between Iran and the three countries since the war, which began with U.S. and Israeli strikes on Iran, spread to Saudi Arabia and Yemen. Regional performance was mixed, with most Gulf markets rising while Egypt’s market declined and Bahrain fell. The gains came amid continued attacks and tensions, so the scheduled talks were not evidence that fighting had stopped or that an actual de-escalation had been achieved.

Trading value in the Saudi market was about 5.18 billion riyals, with more than 342 million shares traded, as 259 companies rose and 8 fell. The figures reflect the breadth of the session’s gains within the market, while the index posted an increase of 323.28 points. In energy markets, Brent crude fell 1.9% to $114.48 a barrel after reports that Qatari mediators were in Tehran on Sunday. Brent had risen 6.2% in the previous week to its highest weekly close since mid-2022. Reuters linked that advance to Houthi attacks in Saudi Arabia and concerns about disruptions to energy supplies, keeping security and energy risks in the background of equity trading.

Saudi Arabia’s foreign ministry said the visit to Tehran was part of efforts to “de-escalate” and strengthen dialogue and diplomatic solutions, and stressed the need to open channels for negotiations to prevent a return to military escalation. Saudi Arabia was represented by Defense Minister Prince Khalid bin Salman, Pakistan by Army Chief Field Marshal Asim Munir, and Turkey by intelligence chief Ibrahim Kalin, according to Saudi and Iranian officials cited by Reuters. Iranian Foreign Ministry spokesman Esmaeil Baghaei said the agenda included “Israel’s expansionist policies, developments in the Palestinian territories and Lebanon, and the repercussions of U.S. and Israeli military action against Iran.” A Pakistani security official added that the agenda also covered U.S.-Iran talks, Houthi attacks on Saudi Arabia, the Strait of Hormuz and the U.S. blockade of Iranian ports. The breadth of these issues shows the meeting was scheduled to address multiple security and political matters, without any results or agreement to halt the fighting being announced.

In Egypt, parliament voted on October 26 to authorize President Abdel Fattah el-Sisi to provide military support to Saudi Arabia to defend it against attacks by Iran-backed Houthis, according to the Associated Press. Parliament did not publish details of the closed vote. The vote coincided with a decline in Egypt’s market, as security developments involving Saudi Arabia were part of the regional picture. The Houthis said on Monday that they had attacked pumping stations on Saudi Arabia’s east-west pipeline and Riyadh airport, but Reuters reported that there was no immediate Saudi confirmation of the attacks. The contrast between the scheduled talks and continued statements about attacks added to concerns over energy supplies and regional security.

Baghaei said Tehran had not closed the door to diplomacy and that messages were being conveyed to the United States through mediators, while negotiations over the war appeared to have been stalled for weeks, according to the Associated Press. U.S. President Donald Trump said on Sunday, October 25, that there would be no strike on Iran that day. Reuters noted that earlier mediation efforts involving Pakistan and Qatar helped secure a temporary peace agreement in June, but it quickly collapsed as fighting resumed. Looking to next week, Reuters pointed to meetings of several central banks and corporate results, with U.S. core inflation expected to reach 3.1% in September and the U.S. economy to grow 3.2% year over year in the third quarter. It said rising oil prices could increase inflation concerns among monetary policymakers.