Friday , July 20 2018
Breaking News
Home / International Markets / Saudi stock market falls below 8,000 points
Saudi stock market falls below 8,000 points

Saudi stock market falls below 8,000 points

RIYADH: Most Middle East stock markets have become more stable on here the other day, after decollete in previous days, as the price of oil recovered slightly. But fund managers said it was by no means clear that any sustained recovery of stock prices was starting.

Brent crude climbed above $62 per barrel, after hitting 5-1/2-year lows of $60.28 earlier, as traders began pricing in expectations of improving global manufacturing data to be published later this week.

Dubai stock index inched up 0.1 percent to 3,325 points as most shares in the emirate gained. The market rose as much as 4.8 percent during the day before giving up almost all those gains by the end of the session.

The Dubai index had tumbled 14.4 percent in the two previous sessions as oil’s plunge triggered panic selling. With the outlook for oil still uncertain, very few people are willing to call a bottom for Gulf stock markets.

“It’s just a normal technical rebound, there’s nothing more at this stage,” Sebastien Henin, head of asset management at The National Investor in Abu Dhabi, said of Monday’s equity market trading. “It is not a game changer.”

Abu Dhabi and Oman also gave up all their intra-day gains and closed down 0.7 percent and 0.9 percent respectively. Renaissance Services, which provides services to the oil and gas sector, was the biggest loser in Muscat, tumbling 8.8 percent.

Gulf bourses have been closely correlated with oil prices for the last few weeks as investors became worried that a sharp decline in oil revenues could trigger large government spending cuts and thus slow non-oil growth.

Analysts and fund managers believe this is unlikely to happen in countries other than Oman and Bahrain, since the big Gulf economies have huge fiscal reserves. But stock markets may remain under pressure from retail investor selling until there is clear evidence that government spending and corporate profit growth is staying strong.

Qatar’s market was the most upbeat and jumped 3.1 percent on Monday as all traded stocks rose. Shares in Barwa Real Estate surged 5.4 percent after the firm won a 750 million-riyal ($206 million) contract from a government company to build and operate low cost-warehouses.

Qatar is expected to maintain strong economic growth and a fiscal surplus next year despite oil’s plunge, the government said on Sunday.

Saudi Arabia’s benchmark, on the other hand, underperformed the region and dropped 2.6 percent to 7,905 points as an initial recovery gave way to a fresh sell-off across the board. The market’s year-to-date gains, which peaked at 30.6 percent in September, have now turned into a 7.4 percent loss.

Analysts say many Gulf investors may continue selling into any strength for a while