GCC stock markets hit by lower international oil prices

JEDDAH/DUBAI — Gulf stock markets sank on Monday as oil prices and global equities dropped because of the possibility of a US interest rate hike, while Dubai builder Drake & Scull dropped amid concern over its financial situation.
Brent crude dropped below $50 a barrel on talk the US Federal Reserve might signal at a conference this week in Jackson Hole, Wyoming, that it is gearing up to raise interest rates.
The Saudi stock index dropped 1.7 percent to 6,110 points, confirming a break of technical support on its early August low of 6,226 points. That triggered a bearish right triangle formed by the highs and lows since April and pointing down to the 5,600-point area in the medium term.
The market’s drop was broad-based, with losers outnumbering gainers 160 to four. Saudi Industrial Investment Group plunged 7.7 percent in its heaviest trade since April.
Dubai’s index dropped 0.7 percent as Drake & Scull, the most heavily traded stock, lost 3.0 percent. It has slipped 10 percent since mid-August, when it posted a big second-quarter net loss; the Gulf construction industry has been hit hard by an economic slowdown due to low oil prices, and companies have had difficulties obtaining payments in Saudi Arabia.
Qatar’s index dropped 0.7 percent. It has now erased most of the gains posted last week on expectations for foreign fund inflows when FTSE upgrades the market to emerging-market status in mid-September. Among major losers, petrochemical producer Industries Qatar dropped 1.2 percent and Qatar National Bank (QNB), the Gulf’s biggest listed lender, slid 1.6 percent.
But drilling rig provider Gulf International Services rose 0.7 percent to 36.90 riyals after QNB rated the stock “outperform” with a price target of 45 riyals, though that was down from a previous target of 53 riyals.
In Egypt, the index slid 1.3 percent with real estate firm Palm Hills Development sagging 3.5 percent and Emaar Misr down 2.7 percent.
However, Minapharm Pharmaceuticals jumped 5.5 percent in thin trade after saying first-half net profit jumped 34 percent from a year earlier. — Reuters