Further weakness in oil prices and the decision by Fitch Ratings to cut its outlook for Saudi Arabia’s debt look set to weigh on Middle East stock markets on Sunday.
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The Dubai Financial Market General Index fell 4.71 per cent to be at 3,534.01, after losing more than 10 per cent from its recent high.
The Tadawul All-Shares Index in Riyadh, the Gulf’s leading market, shed 549.51 points or 6.86 per cent to close at 7,463.32 points. Other Mideast indexes, which trade from Sunday to Thursday, also tumbled.
The dramatic fall in stock prices across the region came after oil prices slid to new lows during Friday trade, with New York’s light sweet crude falling to Dollars 40.04 per barrel, the lowest level since March 2009. Prices have fallen nearly 60 percent since this time previous year. Concerns about slowing growth in the world’s second-largest economy shook markets around the world and drove the U.S. stock market to its biggest drop in almost four years on Friday.
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Meanwhile, Fitch lowered its outlook for Saudi Arabia to “negative” from “stable”; Standard & Poor’s took this action in February while the third major rating agency, Moody’s, has not so far done so. Blue chip equities Emaar Properties, Dubai Investments and Drake and Scull worldwide were all down about 6 per cent.
