Saudi Arabia's benchmark index tumbled more than 2% in early trade, dragged down by steep losses in banking and materials stocks. The Tadawul All Share Index dropped about 2.2%, with financial shares leading the decline. Major lenders fell around 3.4%, while another banking stock plunged over 4%, reflecting broad-based selling across the sector.

In contrast, Saudi Aramco rose about 3.4%, tracking firmer crude prices amid heightened geopolitical tensions in the Middle East. The energy giant's gains helped cushion broader index losses, given its significant market weight. Materials companies also declined, adding to downward pressure.

The divergence highlights how rising oil prices support energy stocks while concerns over regional escalation weigh on financials and cyclical sectors. Trading remains volatile as investors assess geopolitical developments and their potential impact on oil flows and regional economic activity.