Gulf markets in shock as oil prices plunge

Gulf markets in shock as oil prices plunge
Stock markets in Arab Gulf states were in panic as oil prices and increasing tensions between Saudi Arabia and Iran dented investors' confidence in the region.
2 min read
07 January, 2016
Low oil prices and regional turmoil have forced Gulf shares down [AFP]

Shares in energy-rich Arab Gulf states fell sharply on Thursday as oil dived to an 11-year low and China triggered a global markets rout.

The gloomy economic indicators combined with tensions between regional heavyweights Saudi Arabia and Iran to dent investor confidence, leading to a massive sell-off that sent prices crashing.

Markets in Riyadh and Dubai led the slide as both lost more than three percent in early trading. The remaining five Gulf bourses were also down.

Minutes after opening, the Saudi Tadawul All-Shares Index shed 3.7 percent to hit a three-year low.

The Dubai Financial Market Index lost around 4.0 percent to fall below the key 3,000-point mark for the first time this year, while its sister market in Abu Dhabi dipped 2.3 percent.

Qatar Exchange, the region's second largest, dropped 3.0 percent, and the normally dormant Kuwait Stock Exchange lost 1.7 percent to trade at levels last seen 11 years ago.

Oman and Bahrain bourses lost 0.1 percent and 0.7 percent, respectively.

All Gulf stock exchanges ended 2015 in negative territory, led by Saudi Arabia, after the sharp decline in oil prices.

Riyadh broke off diplomatic ties with Iran on Sunday after protesters set fire to its Tehran embassy and a consulate in second city Mashhad.

Decades of tensions between the two countries were ignited after Saudi Arabia executed a Shia cleric, Nimr al-Nimr, sparking an angry response from Tehran.

Oil prices plunged close to $33 a barrel on Thursday, as crude extended losses on rising US energy stockpiles and China's weakening currency.

Beijing suspended trading at its two bourses after losses reached seven percent due to a poor economic outlook in the world's second largest economy.

European stock markets tumbled at the start of trading Thursday following heavy sell-offs across Asia.