KUWAIT CITY, 14 March 2006 — Stock markets in the Gulf states nose-dived yesterday on the back of strong correction pressure, sending shockwaves across the region and fears of a possible long-term slide.
Six of the seven bourses in the six-nation Gulf Cooperation Council (GCC), which made historical gains during the past five years, closed the day’s trading lower.
Saudi’s stock market shed 4.8 percent to finish the day at 15,641.69 points, its lowest close since Dec. 26.
Dubai Financial Market dropped 5.2 percent yesterday to finish at 693.03 points, its lowest close since April last year. The market index is now down 32 percent on its year-end close of 1,019.69 points, and about 47 percent below its all-time high of 1,302.95 points set in August last year.
Kuwait Stock Market plunged to a five-month low yesterday despite a government pledge to inject cash into the market which has been reeling from a sharp correction. The KSE Index finished down 3.2 percent at 10,440.30 points, its lowest closing since Oct. 3, while the 343.30 point loss represented its largest single-day drop.
The Index is now 8.8 percent below its 2005 close of 11,445.10 points and down 13.4 percent on its all-time high of 12,054.70 set Feb. 7.
Abu Dhabi Securities Market finished the day’s trading at 4,208.00 points, down 2.53 percent. The index is now 19.1 percent below 2005 close of 5,202.95 points and a massive 34 percent below its all-time record high.
Bahrain’s stock market also finished trading at 2,171.16 points, down 1.55 percent, dropping below its year-end close of 2,195 points for the first time.
Muscat Securities Market dropped slightly by 0.37 percent to close at 5,316.62 points, about nine percent above its 2005 close of 4,875.11 points. It is the only GCC market to remain over last year’s finish.
Doha Securities Market was the only GCC market to make gains yesterday. It closed up about a half percentage point at 9,602.24 points.
But it is still 13.1 percent below last year’s close of 11,053.24 points.
The seven markets now have a total capitalization of about $1.05 trillion, down some $100 billion on their 2005 value and more than $200 billion below their peak value.
European stock exchanges opened the week on a rise yesterday, with the London FTSE 100 index gaining 0.76 percent to close at 5,952.8 points. In Paris the CAC 40 added 0.75 percent to finish at 5,107.47 while in Frankfurt the Dax rose 0.87 percent to 5,855.16.
Asian stocks closed higher yesterday. In Tokyo, The Nikkei-225 index rose 245.88 points to 16,361.51 on turnover of 1.61 billion shares. In Seoul, the KOSPI index closed up 18.21 points at 1,338.28. In Hong Kong, the Hang Seng Index added 97.02 points to 15,542.07.
In Sydney, the S and P ASX 200 jumped 63.2 points to 4,951.3. In Singapore, the Straits Times Index rose 15.41 points to 2,512.14. In Kuala Lumpur, the composite index added 0.07 points at 922.03. In Manila, the composite index rose 18.39 points at 2,121.76. In Bombay, the benchmark 30-share Sensex index has gained for three consecutive trading sessions and rose 38.55 points to 10,803.71 yesterday.
In New York, US stocks rose yesterday. The Dow Jones Industrial Average added 16.97 points (0.15 percent) to 11,093.31 and the NASDAQ composite climbed 8.48 points (0.37 percent) to 2,270.72 at 1640 GMT. The broad-market Standard and Poor’s 500 index increased 3.40 points (0.27 percent) to 1,284.98.
Meanwhile, major currencies remained stuck in narrow ranges against each other yesterday, reflecting a quiet start to the week ahead of some key US data in the days to come.
The euro rose to 1.1943 dollars in late European trading from 1.1907 dollars in New York late on Friday. The dollar traded for 119.00 yen, unchanged from Friday.
On the London Bullion Market, the price of an ounce of gold rose to $543.50 per ounce, from $535 on Friday.
World oil prices rallied yesterday in volatile trading.
New York’s main contract, light sweet crude for delivery in April, jumped 64 cents to $60.60 per barrel in pit trading. In London, the price of Brent North Sea crude for April delivery gained 37 cents to $61.29 per barrel in electronic deals.
New York prices dropped six percent last week after official data revealed high inventories of US crude and the OPEC group maintained its oil production levels at a 25-year high.
Robust US stockpiles had meanwhile caused prices to fall at various points yesterday. But supply concerns remain.