Gulf stocks dive to multi-year lows on oil slump

KUWAIT CITY — Share prices in the energy-rich Gulf states tumbled to multi-year lows on Sunday after oil prices closed the week below $38 a barrel, the lowest in seven years.

The slide was led by markets in the United Arab Emirates and Saudi Arabia, which plunged below key resistance points amid a sell-off by concerned investors.

Crude prices nosedived Friday, with Brent dropping 4.5 per cent to $37.93 a barrel and West Texas Intermediate losing 3.1 per cent to $35.62 a barrel.

Gulf states, which pump over 18 million barrels of oil per day, heavily depend on crude income for public revenues.

The Saudi Tadawul All-Shares Index (TASI) dropped 2.65 per cent to 6,764.60 points, its lowest close since November 2012. It has lost 18.8 per cent since the start of the year.

TASI, the largest Arab bourse, slid lower during the day but recovered before closing.

The Dubai Financial Market Index dipped 2.1 per cent to finish on 2,882.80 points, a two-year low. The index has dropped 23.6 per cent since the start of the year.

Abu Dhabi Securities Exchange also lost 2.1 per cent to close barely above the 4,000-point mark. It is currently trading 12 per cent lower than at last year's finish.

Qatar exchange, the second largest Arab bourse, shed 3.7 per cent to close at 9,643.65 points, the lowest level since September 2013. It has shed 21.5 per cent compared with last year.

The Kuwait Stock Exchange dropped 0.93 per cent to 5,633.28 points, a three-year low. It has lost 13.8 per cent on the year.

Muscat Securities Exchange slid 0.66 per cent to 5,414.99 points, a 12-month low, while the tiny Bahrain Stock Exchange dropped slightly.

Gulf private companies are feeling the heat from government measures to cut capital spending on which they heavily rely.