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Sun 25 Aug 2019 05:29 PM

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Middle East stocks slide as US-China trade war escalates

China has threatened to impose additional tariffs on $75 billion of US goods including soybeans, automobiles and oil

Middle East stocks slide as US-China trade war escalates
Gauges in Saudi Arabia, Kuwait and Dubai lost at least 1.7 percent on speculation slowing growth will sap demand for oil.

Stocks across the Middle East’s most liquid markets declined in a sign that the latest escalation in the US-China trade war is deepening concern about a global recession.

Israeli stocks led the retreat, losing 3 percent, as all but one member of the TA-35 index fell in the wake of the sell-off in the US Friday. Gauges in Saudi Arabia, Kuwait and Dubai lost at least 1.7 percent on speculation slowing growth will sap demand for oil.

“If there is regional tension or if oil faces pressure, Saudi markets tend to be the most impacted in the GCC,” said Aarthi Chandrasekaran, a money manager at investment bank Shuaa Capital PSC in Abu Dhabi. “If there is a global meltdown, Dubai and the United Arab Emirates tend to be most impacted as the role of international investors remains high inside the financial market.”

The declines may be a taste of what’s in store for the rest of the world on Monday after China threatened to impose additional tariffs on $75 billion of US goods including soybeans, automobiles and oil, in retaliation for President Donald Trump’s planned levies on Chinese imports.

China is the biggest trading partner for Saudi Arabia, the United Arab Emirates, Kuwait and Oman, all of which rely on income from oil exports to fund government spending. Brent crude declined 1 percent to $59.34 per barrel Friday, below the breakeven prices for most budgets in the Gulf Cooperation Council nations.