Abstract
This paper addresses the critical requirement to understand how global political and economic trends affect stock market dynamics in the Gulf Cooperation Council (GCC) region. Prompted by the region's economic dependency on oil and the growing integration of GCC markets into global financial systems, it investigates the impact of three global risk factors on both Islamic and conventional stock markets in the GCC: financial risk (US CDS and global interest rate volatility), commodity price risk (oil price volatility), and political risk (global geopolitical risk). The present research adopts the method of moments quantile regression to assess the asymmetrical effects of these risks across various market conditions from 2011 to 2021. The findings show significant disparities in stock market responses to global risks in bearish, bullish, and normal states, highlighting the nuances of market dynamics in the GCC. In the face of rising global hazards, Islamic assets may provide potential for portfolio diversification. Policy recommendations emphasize the necessity of incorporating global risk variables into investment strategies to reduce volatility and improve market stability in the GCC.
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