Saudi bourse hits seven-week low, as falling oil prices and drop in global stocks dent sentiment
Saudi Arabia's bourse hit a seven-week low, as falling oil prices and a drop in global stocks dented sentiment.
Saudi Basic Industries Corp (SABIC) and Saudi Arabian Fertilisers shed 0.3 percent each, and National Industrialisation dipped 0.5 percent.
Oil fell on Wednesday, dented by weak economic data in China and the US, while euro zone debt worries and sluggish growth also kept investors wary of holding demand sensitive commodities.
Saudi petrochemical stocks tend to track oil prices, with crude impacting their bottom line. Oil is also seen as a proxy for global economic activity and therefore demand for petrochemical products.
World stocks hit their lowest in six weeks on Wednesday after China's November factory activity shrank at its sharpest pace in 32 months, reviving fears of an abrupt slowdown for the world's second largest economy.
"Investors in speculative stocks took profit and they took a downward trend," said Mohammad Omran, member of Saudi economic association. "Fear is accelerating and the party could be over," he said, adding that volumes are increasing on the downside, on back of fears of global recession.
Other large-caps were also down with Al Rajhi Bank slipping 0.4 percent and Saudi Telecom shedding 0.3 percent.
The index ended 0.3 percent lower at 6,086 points, its lowest close since Oct 8.
UAE markets dip to fresh multi-year lows, extending losses at the global scenario deteriorates by the day and investors see little value in local markets.
Dubai's index shed 0.3 percent to 1,347 points, a new seven-year low.
Emaar Properties was the main drag, down 0.8 percent and Shuaa Capital dropped 8.6 percent to a 2003-low.
The bank replaced its chief executive and head of its brokerage in October and last week announced a quarterly loss of AED156m ($43m).
"There is a complete lack of interest in the market right now, but the situation is tricky because from a technical point of view, we are reaching critical levels," said Sebastien Henin, portfolio manager at The National Investor.
Dubai's index was less than 10 points above the intraday low of March 3, of 1,339 points.
"I hope that we will be able to hold this support because if this is not the case, we could have a dive in the market."
Abu Dhabi's benchmark declined 0.4 percent to 2,430 points, a new 32-month low.
In Qatar, profit-taking from Tuesday's gains in banks pushed the index down by 0.4 percent to 8,576 points.
Year-to-date losses in Qatar at the least regionally, are at 1.2 percent.
"The long-term story is still there from both the political and economic side. Qatar is and will continue to be in the near future an overweight in portfolios," Henin added.
Elsewhere, Oman and Kuwait's markets ended near-flat.
Saudi Arabia's shares dipped for a third-straight session with petrochemical stocks weighing and the index heads closer to a psychological support level.
"There is a fear sentiment among investors these days, a concern about what's happening in Europe and US in terms of economic indicators," says Mohammad Omran, member of Saudi economic association. "There are fears that the global economy might be affected in the near future."
The petrochemical index shed 0.3 percent, with regional heavyweight Saudi Basic Industries Corp (SABIC) down 0.3 percent. Saudi Arabian Fertilizers slipped 0.6 percent.
The main benchmark declined 0.1 percent to 6,098 points, hitting a fresh one-month low.
"For the market, the psychological support is 6,000 points, however 5,800 is the long-term support for the market," Omran added.
Asian shares dropped more than 2 percent and US index futures and oil also fell on Wednesday after a private survey showed China's factory sector shrank the most in 32 months and US growth data was revised downwards, stoking fears about the faltering global economy.