DUBAI: Most stock markets in the Gulf ended lower on Monday, as equities across the world tanked on fears of a global recession caused by US President Donald Trump’s sweeping tariffs and the escalating trade war.
China on Friday had announced retaliatory measures, with additional levies of 34% on American goods, confirming investor fears that a global trade war was underway.
When asked about selloff across markets, Trump on Sunday said that investors must endure the consequences and that he would refrain from negotiating with China until the US trade deficit is addressed.
Dubai’s main share index declined 3.1%, recovering from the more-than-6% slump earlier in the session. The index was weighed by a 5.7% slide in sharia-compliant lender Dubai Islamic Bank.
In Abu Dhabi, the index finished 2.6% lower, with energy firm ADNOC Gas retreating 5%.
Oil prices - a catalyst for the Gulf’s financial markets - extended losses, falling 3% on concerns that a potential recession fuelled by the trade war could reduce demand for crude, even as OPEC+ readies a supply increase.
Saudi Arabia’s benchmark index reversed early losses to rebound 1.1%, led by a 6.8% jump in ACWA Power and a 4.8% increase in Saudi Arabian Mining Company.
In the previous session, the index fell 6.8%, its biggest one-day slide since the early days of the 2020 COVID-19 pandemic.
The Saudi market outlook could remain negative as long as the general market sentiment maintains its risk-off mood and oil prices continue to fall, said Hassan Fawaz, chairman and founder of broker GivTrade.
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