A sharp fall in the price of oil weighed heavily on Arabian Gulf stock markets yesterday, as the Dubai and Doha markets fell to their lowest levels in two years.
Crude oil futures fell to six-year lows on Monday, the first day of trading after the biannual meeting of Opec in Vienna broke up with no new pronouncement on production quotas.
Brent crude one month futures fell 5.3 per cent to $40.73 a barrel at the end of Monday’s session, while West Texas Intermediate futures fell 5.8 per cent to $37.65 per barrel.
Brent fell through the $40 a barrel level in early evening UAE time, down 83 cents to US$39.93 a barrel, dragging US and European stocks sharply lower.
Despite both benchmarks trading higher earlier in the day, there was a fresh equities sell-off across the Arabian Gulf. The Qatar Stock Exchange led losses, hitting its lowest level in more than two years before recovering slightly to end the day down 3.09 per cent at 10,096.51.
“Oil’s been in the doldrums for some time, and to lose another 5 per cent on Monday was clearly pretty negative,” said Julian Bruce, the head of institutional trading at EFG Hermes in Dubai.
“Expectations for new production quotas were low, but on the flip side hopes were high. The current impression is that Opec is effectively a defunct organisation and now seemingly a bit of a free for all,” he said.
The Dubai Financial Market General Index suffered its worst one-day fall since mid-November, declining 3.01 per cent to a new two-year low of 3,010.64. The index has lost 20.23 per cent of its value since the start of the year.
Shares in Emaar Properties, the index’s heaviest weighted stock, fell to a two-year low yesterday, ending the day down 3.41 per cent at Dh5.38.
Arabtec Holding fell 2.86 per cent to Dh1.02, its lowest level in nearly four years.
The Abu Dhabi Securities Exchange General Index ended the day down 2.36 per cent at 4,110.26, its worst daily fall since last month.
FGB, the capital’s heaviest weighted stock, finished the day 2.07 per cent lower at Dh11.80, its lowest level in two years. ADCB finished down 5.85 per cent at a 12-month low of Dh5.79.
Shares in Saudi Arabia, the world’s largest oil exporter, fell by nearly 3 per cent in early trading, before paring losses.
Investors are now bracing themselves for next week’s US Federal Reserve’s policy meeting, with odds shortening on the first rise in US interest rates in more than nine years.
jeverington@thenational.ae