Financials drag major Gulf markets lower

Major stock markets in the Gulf ended lower on Tuesday, as financial shares dropped after the International Monetary Fund warned of rising debt risks in the coronavirus-hit Middle East.

The IMF said on Sunday that countries in the Middle East and Central Asia need to curb their financing requirements, as a surge in government debt, exacerbated by the pandemic, threatens recovery prospects.

Lower demand and a slump in commodity prices eroded state finances last year. In the Middle East and North Africa, fiscal deficits widened to 10.1% of GDP in 2020 from 3.8% of GDP in 2019.

Saudi Arabia's benchmark index dropped 0.7%, weighed down by a 1% decline in Al Rajhi Bank and a 1.7% decrease in Saudi National Bank.

In Dubai, the main share index finished 0.8% lower, with its top lender Emirates NBD and Dubai Islamic Bank (DIB) losing 1.7% each.

DIB, the largest Islamic lender in the United Arab Emirates, has hired banks to arrange a planned benchmark issuance of US dollar-denominated Additional Tier 1 sukuk, a document showed on Monday.

The Abu Dhabi index declined 1.2%, dragged down by a 2.2% fall in First Abu Dhabi Bank, the country's largest lender, and a 5% slide in Abu Dhabi Islamic Bank as the stock went ex-dividend.

In Qatar, the index eased 0.2%, hit by a 1.5% fall in Qatar Islamic Bank.

Outside the Gulf, Egypt's blue-chip index retreated 1.4%, as most of the stocks on the index were in negative territory including market heavyweight Commercial International Bank, which was down 2.2%.

Egypt's current account deficit widened to $4.8 billion in October-December from $3.2 billion in the same period in 2019, according to central bank figures released on Monday.