Gulf equities decline in line with global markets

Stocks across most Gulf bourses tumbled amid one of the worst diplomatic standoffs between Saudi Arabia and Iran in about a quarter century.
The suspension of trading in China shares on Monday, which was followed by a sharp drop of Asian bourses, also negatively impacted investor sentiment across the Gulf markets.
Dubai's DFM General Index fell 1.61 per cent with the blue chip Emaar Properties down for the second consecutive day by 1.79 per cent as Qatar's QE Index led the drop with a 2.6 per cent plunge with shares of Qatar Industrial Manufacturing Company sliding 4.88 per cent.  
In Dubai, Amlak fell 6.38 per cent as Dubai Islamic Bank shed 1.48 per cent. Leading construction company Arabtec slumped 3.91 per cent. Abu Dhabi's ADX stock index fell 1.31 per cent, with banks, real estate and energy stocks making most of the losses.
Saudi Arabia's Tadawul All Share Index shed 0.7 per cent as the Arab region's largest economy and world's biggest oil exporter gave Iran's ambassador to Riyadh 48 hours to leave the country on Sunday after protesters stormed the Saudi embassy in Tehran and set parts of it on fire.
Bloomberg's index of 200 major stocks in the six-nation GCC declined one per cent to the lowest level in almost a week.
The Tehran Stock Exchange's benchmark TEDPIX Index was little changed.
Kuwait's SE Index slipped 0.8 per cent, while  Egyptian stocks slid 1.2 per cent. Oman's MSM 30 Index was the sole gainer in the region, rising 0.2 per cent.
Hussein Sayed, chief market strategist, Mena, IG, said oil surged early Monday by more than three per cent as Saudi Arabia announced  cutting diplomatic ties with Iran.
"The oil rally has nothing to do with fundamentals as Chinese data shows factory orders contracted for the 10th consecutive month, suggesting that pain is not over yet in the second biggest economy. Oil traders are just pricing some risk premium for now and it could widen if tensions intensified within the Middle Eastern region. However, the higher prices go, the more bears will join the trade as energy markets doesn't seem rebalancing in the first quarter," said Sayed.
"Saudi tensions with Iran may push foreign players away for a while," said Talal Touqan, the head of research at Abu Dhabi-based Al Ramz Securities.
Trading on China's benchmark index was halted after the market plummeted by nearly seven per cent after a manufacturing survey earlier revived concerns over the health of the largest economy in the region.
The Shanghai Composite dropped 6.85 per cent to 3296.66 points and the Shenzhen Composite tumbled 8.1 per cent. Stock markets in Hong Kong, Japan, India and South Korea followed the downward journey in China, seeing a huge sell-off.
- issacjohn@khaleejtimes.com

Issac John

issacjohn@khaleejtimes.com