MIDEAST STOCKS-Gulf markets slip as Middle East tensions keep investors cautious

By Ateeq Shariff

March 26 (Reuters) - Most Gulf equities ended lower on Thursday as investors remained cautious over fast-moving developments in the Middle East, and Iran said it was reviewing a U.S. proposal to end the conflict.

President Donald Trump said Iran was eager to strike a deal, while Iranian Foreign Minister Abbas Araqchi said there had been no direct dialogue or negotiations with the U.S., although messages had been exchanged through intermediaries.

Conflicting messages from both sides over ceasefire talks have kept investors on edge.

Dubai's main share index .DFMGI - which jumped more than 4% in the previous session - slid 3.2%, with Emaar Properties EMAR.DU retreating 4.7% and top lender Emirates NBD ENBD.DU tumbling 5%.

In Abu Dhabi, the index .FTAFDGI dropped 1.8%, hit by a 2.6% fall in Aldar Properties ALDAR.AD.

GCC equity markets experienced pressure amid intensifying geopolitical risks, which continued to weigh on investor sentiment and reinforce caution across the region, Milad Azar market analyst at XTB MENA.

The unclear outlook for ongoing diplomatic efforts generated mixed market behavior, while evolving expectations sustained near-term volatility, Azar added.

The Qatari index .QSI declined 1.3%, weighed down by a 1.2% fall in Qatar Islamic Bank QISB.QA and a 4.1% slide in Qatar Gas Transport QGTS.QA.

According to Azar, GCC markets will remain vulnerable to geopolitical shifts, but diplomatic progress and strong macro fundamentals could support a rebound.

Saudi Arabia's benchmark index .TASI reversed early losses to finish 0.1% higher, helped by a 1.6% gain in petrochemical maker Saudi Basic Industries Corp 2010.SE and a 0.5% increase in oil behemoth Saudi Aramco 2222.SE.

Oil rose more than 3%, rebounding from the previous session's losses, as prospects for a prolonged conflict in the Middle East stoked concerns over further supply disruptions.

The near-month-long war, sparked by joint U.S.-Israeli strikes on Iran, has effectively brought about a closure of the Strait of Hormuz, a key route for global oil and liquefied natural gas flow.

Outside the Gulf, Egypt's blue-chip index .EGX30 lost 0.9%.