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Sun 26 Oct 2008 09:55 AM

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Gulf markets drop sharply on global fears

UPDATE 4: Drop led by Qatar and Oman, with both main benchmarks shedding over 8%.

Gulf stocks dropped sharply on Sunday after stocks tumbled around the world at the end of last week as investors fearing a long and deep worldwide recession dumped risky assets.

The drop was led by Qatar and Oman, with both main indexes shedding more than 8 percent.

Oman's benchmark ended down 8.29 percent on 6,506.03 points, with losses paced by Oman Telecommunications Co. (Omantel), which slumped 9.28 percent, and Bank Muscat, which lost 7.68 percent.

Qatar's measure closed 8.93 percent lower on 6,892.95 points, dragged down by Qatar National Bank, which dropped 9.54 percent, Industries Qatar, down 9.33 percent, and Qatar Telecom, down 5.65 percent.

Markets in the UAE also suffered, with real estate and banking stocks weighing both Dubai and Abu Dhabi.

Dubai's main index fell 4.74 percent to 3,102 points, with Arabtec Holding plunging 9.93 percent, Emaar Properties falling 6.33 percent and Dubai Islamic Bank (DIB) retreating 8.06 percent.

In Abu Dhabi the benchmark fell 3.77 percent to 3,389 points. National Bank of Abu Dhabi (NBAD) dropped 9.06 percent, First Gulf Bank fell 9.70 percent, while Aldar Properties ended 7.31 percent lower and Sorouh Real Estate 6.07 percent lower.

Kuwait's main index fell to its lowest close in more than 19 months as investors drop banking stocks after the central bank stepped in to support Gulf Bank, which was hit by derivatives trading losses.

The index fell 3.5 percent to 10,114.30 points, its lowest close since March 14, 2007. Kuwait Finance House slid 4.9 percent and Al-Ahli Bank 5 percent.

"Investors are concerned there could be a run on the banks," said John Sfakianakis, chief economist at SABB bank.

The Kuwait government plans to introduce a bill to guarantee bank deposits, the central bank said on Sunday.

Banks also dragged Bahrain's index down 3.65 percent to 2,207.06 points. Ahli United Bank tumbled 10 percent and Gulf Finance House 9.59 percent.

Saudi Arabia's main index, which fell almost 9 percent on Saturday, declined 1.66 percent to 5,531points, recovering some earlier losses on late-session gains in Saudi Basic Industries Corp (SABIC).

SABIC gained 1.69 percent, bucking a downtrend on the benchmark. Saudi Telecom fells 1.26 percent, having fallen more than 7 percent earlier, and Al-Rajhi Bank shed 2.99 percent. (Reuters)

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