DUBAI: Gulf bourses saw steep declines on Sunday, with Kuwait falling the most following tensions between the US and Iran, while outside the Gulf Egypt was also hard hit as all its shares ended lower.
Iranian military commander Qassem Soleimani was killed on Friday in a US drone strike on his convoy at the Baghdad airport, seen by Tehran as an act of war that risks regional conflagration.
“Not surprising, the Gulf markets are reacting negatively given we are in the middle of all the geopolitics action,” said Vrajesh Bhandari, a senior portfolio manager at Al Mal Capital.
“We fear this can be an overhang over the next few months and not just a one day or week thing.”
Saudi Arabia’s benchmark index lost 2.4 percent, weighed down by a 2.1 percent drop in Al-Rajhi Bank and a 1.7 percent fall in Saudi Aramco to SR34.6 ($9.2), which hit its lowest intraday level since last month’s market debut.
Egypt’s blue-chip index dived 4.4 percent, touching its lowest since September 2019. The country’s largest lender Commercial International Bank closed down 1.9 percent and Eastern Company dived 4.9 percent.
In Kuwait, the index plunged 4.1 percent with all stocks in the red including Kuwait Finance House, down 5.1 percent, and National Bank of Kuwait, off 2.8 percent.
The Dubai index tumbled 3.1 percent, hurt by a 3.1 percent slide in its largest lender Emirates NBD and a 3.7 percent decline in Emaar Properties.
Abu Dhabi’s index lost 1.4 percent, with the UAE’s largest lender First Abu Dhabi Bank retreating 1.2 percent, while Abu Dhabi Commercial Bank was down 3.3 percent.
The decline in Gulf shares comes despite a surge in oil prices, on which all six GCC nations rely heavily for public revenues.
“It’s certainly due to fears of a possible US-Iranian conflict breaking out in the Gulf,” said Mohammed Zidan, market strategist at Thinkmarket in Dubai.
“I think the decline will continue for some time and especially as long as tensions and the threat of an armed conflict continue,” Zidan told AFP.
The Qatar index eased 2.1 percent with all its 20 stocks closing lower. Lender Masraf Al Rayan fell 2.7 percent and Qatar National Bank declined 1.4 percent.
The normally dormant bourse of Bahrain, home to the US 5th fleet, fell 2.3 percent.
The small bourse of Oman dropped by just 0.3 percent.