Iran tensions continue to weigh on Gulf markets

MARKETS SUFFER: Tensions over Iran weighed on Gulf markets for a second day. (Getty Images)

Heightened tensions over Iran continued to cloud most stock markets across the Gulf Arab region, sending the Saudi index sharply lower.

Iran test-fired nine missiles on Wednesday and warned the United States and Israel it was ready to retaliate if they attacked the Islamic republic over its disputed nuclear programme.

"There is negative sentiment all over the region due to Iran and the political situation," said Adel Nasr, local brokerage manager at Oman's United Securities.

The Saudi index plunged 3.18 percent, its biggest one-day fall since Feb. 9, to close below 9,000 points for the first time since April 1. It finished at 8,998.28 points.

Shares of Saudi Basic Industries Corp (SABIC) and Samba Financial Group which plummeted 5.11 percent and 4.52 percent respectively.

Al Rajhi Bank fell 2.31 percent. It reported a net second-quarter profit of 8.2 percent on Tuesday.

"The political tension is overshadowing any positive financial results," said Hisham Tuffaha, head of investment research at Bakheet Investment Group.

Almarai Co, the largest dairy company in the Gulf Arab region by market value, was one of the few stocks to end higher, advancing 0.61 percent, after it posted a 42.3 percent rise in second-quarter net profit.

Abu Dhabi and Dubai indexes were the only measures in the Gulf Arab region to close higher with shares of Union National Bank and Aabar Investments driving the UAE capital's index, and Emaar Properties and Dubai Financial Market Co boosting Dubai.

Shares of Aabar closed 7.59 percent higher after it said shareholders would vote next month on plans to issue convertible bonds worth up to 6.7 billion dirhams ($1.82 billion) to a strategic investor.

"I think speculators are using this news to move the share price up," said Mohammed Yasin, managing director at Shuaa Securities.

Union National Bank climbed 2.32 percent, helping push Abu Dhabi's index up 0.1 percent at 5,006.19 points.

Emaar Properties rose 0.98 percent and Dubai Financial 2.84 percent, with Dubai advancing for the first time in six trading days, closing 0.8 percent higher at 5,405.72 points.

Oman, the Gulf Arab region's best-performing index, fell 1.32 percent, its largest one-day decline in nearly a month, as rising tensions over Iran prompted investors to take profits after six days of higher closes.

The measure ended at 11,708.55 points, led by Bank Muscat which fell 2.36 percent and Oman Telecommunications Co (Omantel) which slipped 0.98 percent.

Oman is up over 31 percent so far this year.

Qatar's main measure fell for a fifth consecutive trading day, led by declines in Qatar Gas Transport Co (Nakilat) and Qatar Telecommunications Co (Qtel) which fell 1.07 percent and 2.1 percent respectively.

Small volume selling led the prices lower in early dealing as investors stepped back from the market

"It's summer with additional tensions over Iran. I think we might see lower volumes over the coming days," said Samer Al-Jouani, general manager of Middle East Finance Brokerage Co.

Qatar's index is the second-best performing measure after Oman and is up over 24 percent this year.

Kuwait's main measure tumbled 1.95 percent, its biggest one-day fall in eight months, closing lower for a sixth consecutive trading day.

Declines across the board were led by Mobile Telecommunications Co (Zain) which fell 3.9 percent and
Kuwait Finance House which slipped 0.72 percent.

Shares of National Bank of Kuwait closed 0.02 percent lower, just before announcing a rise in second-quarter net profit by almost 16 percent.

Bahrain's main index closed lower for a fourth consecutive day led by shares of Gulf Finance House which declined 3.21 percent and Bahrain Telecommunications Co (Batelco) which eased 0.12 percent lower.

The measure closed 0.56 percent lower at 2,843.15 points. (Reuters)

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