United Arab Emirates stock markets slid in early trade on Sunday in response to further weakness in oil prices and the decision by Fitch Ratings to cut its outlook for Saudi Arabia’s debt because of cheap oil.
The main stock index in Dubai, the region’s most volatile market, tumbled 4.0 per cent to 3,563 points, hitting a four-month low. It has no major technical support left before the March low of 3,233 points. Abu Dhabi’s index sank 1.4 per cent.
Among major losers, Dubai’s largest property firm, Emaar Properties, fell 5.9 per cent and Abu Dhabi’s biggest developer, Aldar Properties, dropped 4.4 per cent.
U.S. oil traded below $40 a barrel on Friday for the first time since the 2009 financial crisis, while Fitch lowered its outlook for Saudi Arabia to “negative” from “stable”.
With a relatively diversified economy and strong government finances, the United Arab Emirates is better placed than most Gulf economies to ride out an era of cheap oil.
But investors are concerned that a further plunge in the Saudi stock market and slowing growth there could have an impact on asset prices around the region.