Markets across the Middle East fell in early trade on Thursday after global equities continued to slide along with the price of oil. Dubai led the decline after its index fell below its 200-day average.
The U.S. S&P 500 index dropped 0.8 per cent on Wednesday, while European equities shed 3.2 per cent in their biggest one-day slide in almost four years on deepening concerns about global economic growth. Asian shares also fell on Thursday.
The price of Brent crude slumped below $83 per barrel on Wednesday morning even as the U.S. dollar declined against other major currencies.
Dubai’s index fell 2.7 per cent to 4,370 points as a broad sell-off continued. The benchmark closed on Wednesday below its 200-day average of 4,557 points for the first time since the market’s bull run was beginning in December 2012 – a negative longer-term technical signal.
Abu Dhabi’s index slipped 2.1 per cent as all liquid stocks declined. Qatar’s benchmark slid 1.4 per cent with most constituents in the red.
Bourses in Kuwait and Oman fell 0.8 and 1.8 per cent respectively.
Shakeel Sarwar, head of asset management at Securities & Investment Co (SICO) in Bahrain, said markets in the region remained under the influence of external factors but strong accumulated gains also played their part.
“It’s been a sharp decline but a correction was expected,” he said. “I don’t think its a doom and gloom situation, the markets will stabilise soon. Valuations begin to make sense again and it’s a good buying opportunity.”