The Gulf stock markets fell in early trading on Monday after Yemen's Houthis attacked Israel?overnight, further escalating U.S. and Israel conflict with Iran -and its proxies - in the Middle East.

Donald Trump, the U.S. president, said that Washington and Tehran had been in contact both directly -and indirectly - describing Iran's "very reasonable" new leadership.

Israeli forces said they were targeting Iranian government infrastructure in Tehran on Monday. At the same moment, more U.S. soldiers arrived in the area. The Financial Times reported late Sunday that Trump had said that the U.S. would be able to seize Kharg Island, a major hub for Iran's oil exports. He also suggested a quick ceasefire.

Iran has said that it is 'prepared to respond' to any U.S. land offensive. Washington, it claimed, was planning an attack on the ground while it continued to negotiate.

Dubai's main stock index fell 1.1%. This was due to a 3.1% decline by top lender Emirates NBD, and a -1.9% drop in the sharia compliant lender Dubai Islamic Bank.

The index fell 0.5% in Abu Dhabi. This was due to a drop of 4.1% in Abu 'Dhabi Ship Building, and a 0.1% decline in Aldar Properties.

Fertiglobe shares, which are a producer ammonia and Urea, rose 2.3%.

Emirates Global Aluminium (EGA), the Middle East’s largest producer, announced on Saturday that the Al Taweelah base in the UAE suffered significant damage as a result of Iranian missile and drone strikes. Aluminium Bahrain, which operates the?largest smelter in the world, revealed on Sunday that it was assessing the damage caused by the attacks. Alba shares fell 0.9%.

The Qatari Index fell 0.9% and the Gulf's largest lender, Qatar National Bank, declined 1.1%.

Saudi Arabia's benchmark stock index beat the regional trend by gaining?0.3%. This was helped by an increase of?0.8% in Al Rajhi Bank, and a 0.5% rise in Saudi Aramco.

ADES Holding, meanwhile, added 0.6% after the oil drilling group beat analysts' expectations with an 2% increase in annual net profits. They also reiterated their strong growth forecasts for this year, despite some suspensions of rigs last year, and recent halts because of the war.

Kpler data shows that Saudi crude exports from the Strait of Hormuz were redirected to the Yanbu Port in the Red Sea last week. This eased some supply disruption concerns.

Brent oil prices continued to rise on Monday.

(source: Reuters)