Tuesday 27 September 2022

Gulf bourses end lower on US downgrade

Dubai, August 7, 2011

Bourses in the UAE, Qatar and Oman fell to multi-month lows, rattled by a US rating downgrade which sparked worries the global economy may retreat into recession.     

Dubai's benchmark closed at a 20-week low, slumping 3.7 percent to 1,484 points in its largest daily decline since February 28 at the height of regional political unrest. 

Bluechip Emaar Properties ended down 5.3 percent, Arabtec fell 6.3 percent and Dubai Financial Market  closed off 5 percent.      

'The global story is looking increasingly less optimistic, and at the same time you have equity markets here that have been relatively less volatile for a considerable stretch,' says Akram Annous, Dubai-based Mena strategist at Al Mal Capital.

'That's probably going to start to change now, and I think the majority of the risk is in Saudi Arabia and Qatar's markets because they are more leveraged to the (emerging market) growth story.'      

In Qatar, the index fell to a six-week low, down 2.5 percent at 8,277 points. Shares recovered some of early session losses but still ended at a June 27 low.

Abu Dhabi's measure ended 2.5 percent lower at 2,603 points, a May 26 low. Heavyweights tumble with First Gulf Bank  closing down 5.9 percent while Abu Dhabi Commercial Bank ended 4.5 percent lower. 

Oman's shares ended at a new two-year low, as investors worried about the fallout of US debt woes that led to a credit ratings cut.

The benchmark fell 1.9 percent to 5,651 points, its lowest close since mid-July 2009.

Heavyweight Bank Muscat drops 4.2 percent, Bank Dhofar slipped 2.2 percent and Nawras dropped 3 percent. The index had no gainers.

Saudi Arabia's shares lifted after hitting a five-month low on Saturday. The kingdom's benchmark , the most closely linked to the American economy, rose 0.4 percent to 6,112 points.
Investors in the world's largest oil exporting region -- where all but one Gulf state is pegged to the US dollar -- are worried about the fallout from a weaker greenback.

 'Our currencies will also depreciate, which could be inflationary for the region and impact negatively on sentiment,'  says Shahid Hameed, Global Investment House head of asset management for the Gulf region.

Elsewhere, Kuwait's index closed down 1.6 percent to 5,968 points at a fresh seven-year ebb, its lowest close since September 2004.     

Bahrain's index ended 0.33 percent lower at 1,277 points. - Reuters

Tags: stocks | Gulf | Dollar | markets | bourses | downgrade |

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