Most stock markets in the Gulf ended lower on Tuesday amid escalating tensions in the region with the Saudi index leading the losses.
Washington vowed to take “all necessary actions” to defend its troops following a deadly drone attack in Jordan by Iran-backed militants, the first U.S. military deaths since the Israel-Gaza war began, putting markets on edge.
Saudi Arabia’s benchmark index declined 2.2%, dragged down by a 2.7% drop in Al Rajhi Bank and a 10% slide in drilling service provider ADES Holding Co.
Saudi Aramco on Tuesday said it was asked to cut its planned maximum sustainable oil production capacity to 12 million barrels a day (bpd), having raised it to 13 million bpd almost four years ago.
According to Farah Mourad, senior market analyst at EQUITI Group, the kingdom’s decision to cut its planned maximum sustainable oil production capacity by one million bpd implies that the expected demand might not be as high as initially anticipated.
Also, supply disruptions in the Middle East have led to a decrease in investor confidence, said Mourad. While, the bleak economic outlook in China - the world’s second-largest crude consumer - also added to the worries after a Hong Kong court ordered the liquidation of property company China Evergrande Group deepening its real estate crisis.
Gulf bourses end mixed; Egypt rises
In Abu Dhabi, the index eased 0.3%.
Dubai’s main share index gave up early gains to close 0.1% lower, hit by a 0.8% fall in top lender Emirates NBD.
However, the index’s losses were limited by a 13.2% surge in Mashreqbank. The lender, which closed at its highest since Nov. 2008, reported a 150% surge in fourth-quarter profit.
The Qatari benchmark lost 0.4%, with petrochemical maker Industries Qatar losing 2.3%.
The Federal Reserve’s policy meeting and Chair Jerome Powell’s commentary will likely be the main event of the week, while investors will also watch out for the U.S. employment report this week to help gauge the direction markets will take in the months to come.
Outside the Gulf, Egypt’s blue-chip index advanced 3.8%, led by a 15% jump in Oriental Weavers Carpets.
Egypt’s central bank is expected to leave overnight interest rates unchanged at a policy meeting on Thursday, according to a poll of analysts, who are on tenterhooks awaiting the outcome of talks with an International Monetary Fund team now in Cairo.
======================================== SAUDI ARABIA down 2.2% to 11,986 ABU DHABI fell 0.3% to 9,519 DUBAI eased 0.1% to 4,168 QATAR dropped 0.4% to 10,110 EGYPT rose 1.1% to 11,337 BAHRAIN gained 1.4% to 2,070 OMAN eased 0.1% to 4,587 KUWAIT was up 0.2% to 8,032 ========================================
Comments