Gulf stock markets fell sharply on Tuesday as Brent crude extended losses after plunging 5 percent a day earlier and the threat of a fresh euro zone crisis in Greece also prompted investors to sell risk assets globally.
Brent crude touched a fresh 5-1/2-year low at $52.28 a barrel on Tuesday on oversupply concerns. MSCI’s emerging market index was down 0.9 percent.
Saudi Arabia’s main index dropped 3.9 percent shortly after opening in a broad sell-off. Shares in petrochemicals giant Saudi Basic Industries (SABIC) tumbled 4.2 percent.
The kingdom’s market is heavily weighted towards petrochemicals, whose profit margins will suffer from cheaper crude.
Dubai’s bourse tumbled 5.1 percent. Emaar Properties, the emirate’s largest listed developer, topped trading volume as it lost 8.4 percent.
However, shares in Air Arabia bucked the trend and added 0.7 percent after the firm said on Monday it had bought a 49 percent stake in Jordan’s Petra Airlines and would establish a hub in the country. The carrier may also benefit from the sustained drop in oil prices.
Elsewhere in the Gulf, Abu Dhabi’s index fell 2.3 percent, Kuwait lost 1.8 percent and Oman’s bourse slipped 1.1 percent.
Egypt’s market dropped 2.7 percent, with most stocks in the red.
As an oil importer, Egypt should benefit from cheaper crude, but its equities are also vulnerable to global emerging market flows and Cairo’s government relies heavily on financial aid from the oil-exporting Gulf states.-Reuters