Gulf markets tumble as Israel-Iran conflict escalates

Stock markets in the Gulf ended lower on Sunday as Israel and Iran exchanged attacks, raising concerns about a potential broader Middle East conflict.

Israel said it had targeted Iran's nuclear facilities, ballistic missile factories and military commanders in strikes that started on Friday, in what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon.

Iran responded by launching attacks on Israel and calling off Sunday's nuclear talks that the United States said were the only way to halt Israel's bombing.

Saudi Arabia's benchmark index (.TASI) finished 1 per cent lower as stocks fell across the board, weighed down by a 1.5 per cent fall in Al Rajhi Bank (1120.SE) and a 3.1 per cent decrease in the country's biggest lender Saudi National Bank (1180.SE).

However, oil giant Saudi Aramco (2222.SE) advanced 1.8 per cent.

Oil prices jumped on Friday and settled 7 per cent higher as Israel and Iran traded air strikes, feeding investor worries that the combat could widely disrupt oil exports from the Middle East.

Israel late on Saturday attacked Iranian energy infrastructure including an offshore installation on the South Pars gas field which Iran shares with Qatar and is the source of most of the gas produced in Iran, stoking fears of potential disruption to the region's energy exports.

The Qatari benchmark (.QSI) declined 3.2 per cent - its biggest intraday fall since April - with all its constituents in negative territory including the Gulf's biggest lender Qatar National Bank (QNBK.QA), which concluded 4.2 per cent lower.

Elsewhere, Qatar Gas Transport Nakilat (QGTS.QA) dropped 3.3 per cent.

Among other fallers, Kuwait's bourse (.BKP) plummeted 4.6 per cent, with Kuwait Finance House (KFH.KW) losing 3.7 per cent.

Shares in Jazeera Airways (JAZK.KW) nosedived 18.4 per cent as airlines avoided the airspace over most of the region.

Outside the Gulf, Egypt's blue-chip index (.EGX30) sank 4.6 per cent, its biggest fall in about 14 months, dragged down by a 4.3 per cent decline in Commercial International Bank (COMI.CA) and a 12.4 per cent plunge in investment bank EFG Holding (HRHO.CA).