Dubai’s index declined the most in two weeks, leading a regional equity rout, as oil headed for its longest monthly losing streak since 2008.
The DFM General Index tumbled 5.4 per cent, the steepest retreat since Dec. 16, to close at 3,725.79. It’s the worst performer among more than 90 indexes tracked globally by Bloomberg.
The Tadawul All Share Index in Saudi Arabia, the world’s biggest crude exporter, sank 4.2 per cent. Oil has fallen 18 per cent so far in December, poised for its sixth straight monthly loss.
“Oil still remains the fundamental reason for the equity markets to move here” and the drop in crude prices is “affecting sentiment in regional markets,” Hisham Khairy, the Dubai-based head of institutional trade at Mena Corp. Financial Services LLC, said by telephone. If oil prices fall further, “we can see another ugly scenario,” he said.
At least six stock indexes in the Gulf Cooperation Council, home to about a third of the world’s proven oil reserves, sank into bear markets in the past month as crude prices headed for the steepest annual slide since 2008.
Brent has declined 48 per cent this year to $57.62 a barrel at 12:37 p.m. in London, almost half the average price in 2013 and 2012, as the biggest U.S. oil output in about 30 years collided with slowing global demand and OPEC’s refusal to reduce its production levels.
In Dubai, Emaar Properties PJSC, the developer of the Burj Khalifa, the world’s tallest tower in Dubai, slipped 6.5 per cent to Dhs7.30. Dubai Islamic Bank PJSC, the biggest Shariah- compliant lender in the United Arab Emirates, tumbled 5.6 per cent to Dhs6.73, the sharpest retreat since Dec. 16.
Saudi Arabia’s benchmark index slid a second day as Saudi Basic Industries Corp., one of the world’s biggest petrochemicals makers, retreated 4.3 per cent.
Elsewhere in the region, Abu Dhabi’s ADX General Index sank 2.2 per cent. Qatar’s QE Index fell 1.9 per cent with 19 out of 20 members on the benchmark declining. Kuwait’s SE Price Index slipped 1.8 per cent and Oman’s MSM 30 Index lost 2.7 per cent.