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Dubai / Reuters
Gulf stock markets fell early on Monday after oil and Asian equities dropped because of the threat of a U.S. interest rate hike, while Dubai builder Drake & Scull declined sharply because of concern about its financial situation.
Brent crude dropped back to just above $50 a barrel in Asian trade amid talk that a U.S. Federal Reserve gathering this week in Jackson Hole, Wyoming might signal the U.S. central bank is gearing up to raise interest rates.
The Saudi stock index sank 1.6 percent to 6,115 points, confirming a break of technical support on its early August low of 6,226 points.
That triggered a bearish right triangle formed by the highs and lows since April and pointing down to the 5,600-point area in the medium term.
The market’s drop was broad-based, with losers outnumbering gainers 158 to five. Saudi Industrial Investment Group plunged 7.4 percent to 12.60 riyals in heavy trade.
However, Wataniya Insurance rose 2.5 percent in unusually heavy trade after the exchange announced the end of the trading period for rights to the company’s shares.
Dubai’s index dropped 0.5 percent as Drake & Scull, the most heavily traded stock, lost 2.2 percent. It has slipped 10 percent since mid-August, when it posted a big second-quarter net loss; the Gulf construction industry has been hit hard by an economic slowdown due to low oil prices, and companies have had difficulties obtaining payments in Saudi Arabia.
Qatar’s index dropped 1.3 percent, erasing almost all of the gains posted last week on expectations for foreign fund inflows when FTSE upgrades the market to emerging-market status in mid-September.
Among major losers, petrochemical producer Industries Qatar dropped 1.5 percent and Qatar National Bank, the Gulf’s biggest listed lender, slid 2.1 percent.