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.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.