By Ateeq Shariff
Sept 20 (Reuters) - Saudi Arabia's stock market fell on Sunday, a day after Yemen's Houthis said they struck "sensitive" targets in Riyadh with missiles and drones, with the subdued sentiment seeing all the Gulf bourses close lower.
Flames and thick smoke were seen near the Saudi capital's main airport on Saturday after authorities issued overnight alerts warning of potential danger around Riyadh.
The confrontation has become another front in the broader conflict that followed US and
Israeli strikes on Iran in late February. President Donald Trump has reportedly rejected Saudi requests for direct US military intervention against the Houthis.
Saudi Arabia's benchmark index pared early losses to close 0.3% lower, hit by a 2.8% drop in ACWA Power Co .
Attention is turning to US President Donald Trump's meeting with Gulf leaders this week, where any meaningful de-escalation signals could support investor confidence, said Daniel Takieddine, co-founder and CEO of Sky Links Capital Group.
Oil major Saudi Aramco closed 1.3% higher after falling in early trade.
China has privately urged Tehran to help restrain the Iran-aligned Houthis, following a Saudi appeal to Beijing, according to three Iranian sources familiar with the discussions.
In Qatar, the main index retreated 1.1%, pressured by a 4.1% drop in petrochemical producer Industries Qatar.
Outside the Gulf, Egypt's blue-chip index eased 0.2%.
Saudi Arabia fell 0.3% to 10,750
Qatar declined 1.1% to 9,550
Egypt lost 0.2% to 55,371
Bahrain was down 0.2% to 1,920
Oman eased 0.3% to 7,580
Kuwait dropped 0.7% to 9,182
(Reporting by Ateeq Shariff in Bengaluru; Editing by Kirsten Donovan)
