Saudi Arabia’s benchmark equity index recorded its worst session in 18 months on Sunday as renewed fighting with Yemen’s Houthi movement increased concern about regional transport, energy infrastructure and shipping routes. The Tadawul All Share Index closed 2.7% lower after falling as much as 3.4% during the session, according to Reuters market data.

Broad selling reaches major Saudi shares

Selling was widespread across the Saudi market. Saudi Aramco, the exchange’s largest listed company and a central part of the kingdom’s energy sector, declined 0.9%. Separate delayed market data showed hundreds of Saudi-listed stocks finishing lower, indicating that the move extended beyond one company or industry. The Saudi Exchange’s official market pages marked the October 25 session as closed.

Related reporting: Gulf Stocks Retreat as Riyadh Airport Attack Raises Regional Risk

The decline came as Saudi authorities reported intercepting drones and missiles over Riyadh and southern parts of the kingdom. The Associated Press separately reported that King Khalid International Airport reopened two terminals for domestic and international flights on Sunday, more than two weeks after earlier strikes disrupted operations. Saudi military spokesman Maj. Gen. Turki al-Malki said air defences intercepted a ballistic missile and a drone aimed at Riyadh, as well as missiles directed toward the south.

Regional markets move unevenly

The risk-off tone was not uniform across the region. Qatar’s benchmark recovered from early losses to close 0.1% higher. Outside the Gulf Cooperation Council, Egypt’s EGX30 fell 3.6%, its largest one-day decline since June 2025, with most constituents ending in negative territory. Those contrasting moves suggest investors were differentiating between markets even while responding to a shared rise in geopolitical risk.

The size of the Saudi move also matters in context. A 2.7% decline is unusually large for a broad benchmark populated by established banks, energy groups, industrial companies and consumer businesses. It signals that investors changed the discount applied to near-term earnings and operating continuity, but it does not represent a uniform judgment about every listed company.

Why transport and energy channels matter

For financial markets, the immediate concern is the possibility that repeated attacks could raise operating costs or interrupt activity around airports, oil facilities and strategic waterways. Airlines and shipping companies may face route changes, higher insurance premiums or additional security costs. Energy traders also monitor any threat to production and export infrastructure because even a short disruption can affect crude prices, inflation expectations and government revenue across the region.

Sunday’s market reaction does not by itself establish that a major supply outage has occurred. Reuters reported investor concern about shipping disruption and the prospect of wider military action, while the available official statements focused on intercepted attacks and the partial reopening of Riyadh’s airport. The difference is important: equities can reprice rapidly on changing risk expectations before the underlying economic impact is measurable.

Next signals for investors

The next test will be whether transport operations continue to normalise and whether Saudi energy facilities and regional shipping lanes remain available. Further official security updates, oil-market moves and the breadth of selling when other regional exchanges reopen will help show whether Sunday’s fall was a concentrated Saudi risk adjustment or the beginning of a broader repricing. Until then, the session provides a clear measure of how quickly geopolitical developments can move regional financial assets without confirming a lasting change in economic fundamentals.

Sources

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