Gulf stock markets plunged on Sunday after OPEC’s decision to keep crude output unchanged sent oil prices tumbling at the end of last week.
Saudi Arabia’s index dropped 5.3 per cent to an eleven-month low minutes after opening. Shares in petrochemicals giant Saudi Basic Industries (SABIC) were down 7.1 per cent.
Dubai’s benchmark dropped 6.3 per cent to a five-month low, with all traded stocks in decline.
Qatar’s index was down 4.4 per cent, slumping to its lowest level since early July.
Oman’s bourse dropped 5.6 per cent, Abu Dhabi slid 3.3 per cent and Kuwait was down three per cent.
The price of Brent crude has tumbled about 10 per cent to $70.15 per barrel since regional equity markets last traded on Thursday.
“They (OPEC members) won’t meet again until June 2015,” said Sanyalak Manibhandu, manager of research at NBAD Securities in Abu Dhabi. “That means they want to see prices slide.”
Oil’s plunge has become the main concern of Gulf investors in the last few weeks because they fear cheaper crude will force regional governments to cut spending and stifle the growth of local economies and corporate profits.
Saudi Arabia, where petrochemicals account for nearly a third of total corporate earnings of listed firms, is particularly vulnerable to oil price movements which have already hurt profits in the third quarter.
But Manibhandu said Sunday’s panic sell-off could be an overreaction.
“I think that by the end of the day there will be buying opportunities and long-only institutions will increase their positions,” he said.
Egypt’s bourse performed much better than Gulf markets, edging down 0.3 percent as property developer Talaat Moustafa Group fell 1.6 per cent and Telecom Egypt lost 2.2 per cent.