LONDON: Major stock markets in the Gulf advanced in early trade on Tuesday with risk appetite improving after US President Donald Trump said Iran and Israel had agreed to a ceasefire.

Trump announced a complete ceasefire, potentially ending the 12-day war that saw millions flee Tehran and prompted fears of further escalation in the region.

Saudi Arabia’s benchmark index rose 2.1 percent, led by a 1.9 percent rise in Al Rajhi Bank and a 2.1 percent increase in the country’s biggest lender Saudi National Bank.

Elsewhere, recently-listed Flynas surged more than 7 percent to 79.80 riyals.

However, oil behemoth Saudi Aramco declined 1.7 percent, while fertilizers firm SABIC Agri-Nutrients Company retreated 1.1 percent.

Oil prices hit their lowest in two weeks after Israel agreed to Trump’s proposal, alleviating worries of supply disruptions in the Middle East, a major oil-producing region.

Brent crude futures were down $3.82, or 5.3 percent, at $67.66 a barrel at 0645 GMT.

Dubai’s main share index jumped 3.1 percent — its biggest intraday rise since mid-December if the gains hold — buoyed by a 4.7 percent rise in blue-chip developer Emaar Properties.

Among other gainers, budget airliner Air Arabia soared 7.2 percent — its biggest single-day rise in over three years if the gains persist.

Israel has agreed to Trump’s proposal for a ceasefire with Iran after it achieved its goal of removing Tehran’s nuclear and ballistic missile threat, Prime Minister Benjamin Netanyahu said in a statement posted by his office on Tuesday.

In Abu Dhabi, the index gained 2.2 percent, led by a 8.3 percent leap in Aldar Properties.

The benchmark index in Qatar climbed more than 2 percent, with Qatar Islamic Bank rising 2.2 percent.

Qatar reopened its airspace after a brief suspension, its civil aviation authority said early on Tuesday, following a missile attack by Iran on an American air base in Qatar on Monday that caused no injuries.