Foreign institutional investors reduced their positions across Gulf Cooperation Council (GCC) equity markets in July, recording a net capital outflow of $415 million from regional stock exchanges. The pull-back in portfolio allocation was primarily triggered by heightened geopolitical friction and military escalation involving Iran, which prompted international asset managers to scale back risk exposure in Middle Eastern capital markets.

The retreat reflects broader global market sensitivity to regional stability, where renewed conflict around the Arabian Gulf typically impacts investor sentiment, increases energy market volatility, and leads international funds to shift toward defensive positions or reallocate capital to lower-risk markets until political risks subside.

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