Stock markets may remain bearish as oil slides to 4-year low

Stock markets in the Gulf are expected to remain under pressure on Thursday after oil prices – which have become investors' main concern – tumbled to a four-year low as hopes for output cuts by Opec faded.

The price of Brent crude traded below $77 per barrel after Saudi Arabia, Kuwait, Qatar and the UAE indicated they will not propose an output cut during the Opec meeting on Thursday, reducing the likelihood of joint action by the cartel to prop up prices that have sunk by a third since June.

The stock index in Saudi Arabia, the world’s biggest oil exporter, has already lost 3.5 per cent this week in a broad sell-off, while Dubai and Abu Dhabi have fallen 2.6 and 2.8 per cent, respectively.

“Traders are seen unwinding long positions and are opting to remain on the sidelines,” NBAD Securities said in a note on Thursday, referring to Dubai.

The Dubai index opened slightly negative in the morning, and was down 11 points, or 0.25 per cent.

Qatar, which appears to be attracting seasonal inflows from across the region thanks to high dividend yields, has done slightly better and lost 2.4 per cent during the week so far.

On global markets, Asian stocks hit a one-month high on Thursday as investors bet that more central bank stimulus in China and Europe would shore up the global economy.

US markets also rose overnight, but the attention of Gulf investors has shifted away from global equities and local markets look less likely to follow them than in the previous few months.

US crude futures fell more than 1 per cent to $72.61 per barrel, their lowest since September 2010. Brent crude fell 1.7 per cent to $76.49.

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