Most of Gulf stocks drop on weak oil prices

Most stock markets in the Gulf fell in early trade Wednesday after Saudi Arabia and Iran dashed market hopes that the two major OPEC producers would find a compromise at a meeting in Algiers to help ease a global glut of oil.

Brent oil futures sank about 3 percent to around $46 a barrel on Tuesday after Iran rejected an offer from Saudi Arabia to limit its oil output in exchange for Riyadh cutting supply.

Saudi Arabia’s index, which retreated 3.8 percent on Tuesday after the government said it would scale back financial bonuses for public sector workers in an austerity drive, fell a further 0.5 percent in the first half-hour on Wednesday to 5,703 points, approaching technical support on its February low of 5,551 points.

Petrochemical blue chip Saudi Basic Industries sank 1.2 percent although one stock in the sector, PetroRabigh , rose 2.1 percent after saying it would proceed eventually with a rights issue that has been delayed since 2015.

Saudi insurance stocks, which are favourites of local retail investors who now face cuts to their disposable income, were again hit hard; SAGR Insurance dropped 2.9 percent. Travel agency Al Tayyar, also exposed to weak consumer spending, tumbled 4.9 percent.

Dubai’s index edged down 0.3 percent and Abu Dhabi slipped 0.2 percent while the Qatari index was flat. In all three markets, most of the heavily traded stocks barely moved.

Source: Reuters