Brent crude oil slumped near a five-year low and political uncertainty in Greece put pressure on global equities
(Updated 12:24) Gulf stock markets fell
in early trade on Tuesday as Brent crude oil slumped to a fresh 5-1/2-year low
and political uncertainty in Greece put pressure on global equities.
Brent approached $57.0 per barrel as persistent
worries about a global supply glut offset concerns about output disruptions in
Saudi Arabia's main stock index dropped 2.9 percent
with most stocks in the red. Petrochemicals giant Saudi Basic Industries, down
3.2 percent, was the main drag.
Saudi Ceramic Company was among a handful of
gainers, adding 2.2 percent after it announced a bonus share issue, a dividend
payout, and plans to increase its stake in unlisted Ceramics Pipe Co.
Dubai's index tumbled 5.0 percent as most stocks
declined. Builder Arabtec Holding and developer Emaar Properties, the most
heavily traded stocks, lost 7.2 and 6.0 percent respectively.
Although Dubai is much less dependent on oil
revenues than other Gulf states, its stock market has been hit hardest in the
region in recent months because of its higher liquidity, exposure to foreign
investors and the unwinding of leveraged positions.
Elsewhere in the Gulf, Abu Dhabi's index fell 1.3
percent, Kuwait lost 1.6 percent, Oman dropped 2.1 percent each and Qatar's
bourse was down 2.0 percent.
The Saudi government announced last week that it
would continue spending heavily in its 2015 budget plan, easing investors'
fears that cheap oil would lead to major state spending cuts in the Gulf. As
long as state spending continues, economies and corporate profits in the big
Gulf economies are expected to keep growing healthily.
However, Gulf bourses' pull-back on Tuesday showed
weak oil prices can still hurt sentiment among the local retail investors who
dominate trading volumes.
Outside the Gulf, Egypt's bourse edged up 0.3
percent in early trade on the back of developer Talat Moustafa Group and
Commercial International Bank, up 1.9 and 0.5 percent respectively.
Global equity markets were soft on Tuesday as
investors avoided risk after a sharp sell-off in commodities, and also because
of political uncertainty in Greece where Prime Minister Antonis Samaras failed
to get enough support for his presidential nominee on Monday, and will call a
national election for January 25.