GCC stocks take hit from global markets' downturn
Regional stock markets tumbled yesterday on the back of the fall in global markets over the weekend and renewed concerns about economic conditions.
All GCC markets, except Saudi Arabia's Tadawul, faced selloffs during the session with the Dubai Financial Market (DFM) being the leading loser, after it went down 4.97 per cent. The Qatar Securities Exchange lost 1.57 per cent while Abu Dhabi Securities Market (ADX) lost 1.39 per cent. The Muscat Securities Market, the Kuwait Stock Exchange and the Bahrain Securities Exchange ended in the negative territory, too, yesterday.
Only the Saudi Arabian Tadawul All Shares Index managed to close in the positive area yesterday after it moved slightly up by 0.1 per cent. The index had lost 1.35 per cent during Saturday's session.
GCC stocks turned bearish yesterday after the fall in US equities on Friday. Gulf markets are traditionally known to overreact to movements in US markets. The drop in oil prices below $74 per barrel has added to the negative sentiment and increased worries about regional economies.
These concerns increased yesterday after Saudi Finance Minister, Ibrahim Al Assaf, said the financial crisis was still casting a shadow on the global economy and had hurt confidence. This added more concerns about the economy after global markets went down on US plans to rein in banks and limit speculation to prevent another financial crisis. Also, China announced plans to limit its economic growth, moves that are seen as harming the recovery of the global economy. (Mohamad Al Kady)
Despite the current downward trend in the GCC markets, the Kuwait Financial Centre (Markaz) projected bullishness in regional markets this year, especially in Saudi Arabia and Qatar.
It said in a recent research report the global financial crisis has led to significant changes in the outlook of regional stock markets. "In the past a strong oil price was enough to lift the markets to speculative heights. Money was easy to make in that environment, with north being the only direction where the price of any stock would move," it said in the research.
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