GCC stock markets drop as oil, economic worries hurt sentiment
Dubai Financial Market dropped 0.7 per cent as risk appetite of investors took a knock
Dubai: Most major Gulf markets traded lower on Sunday following a lackluster tone set globally on Friday when oil prices dropped and weak economic data in Japan prompted investors to pull back from recent risky bets.
Oil prices fell in the last trading session, pressured by a build-up in US crude inventories and as new pandemic restrictions in China stoked worries about fuel demand in the world's biggest oil importer.
Japan's factory activity also contracted in January and the service sector grew more pessimistic, further clouding the outlook of oil demand, a major source of revenue for GCC economies.
Dubai Financial Market dropped 0.7 per cent as risk appetite of investors took a knock mirroring the mood of their global peers, but also as they chose to book profit after the market got off to a flying start in the beginning of the year.
Dubai's main index is still up around 9 per cent so far this month, helping claw back nearly all the losses it suffered last year.
The market rally comes after the UAE looked set on winning the vaccination race as it outpaced some of the wealthiest countries, convincing investors that the country would be among the first ones to overcome the pandemic and is safe for investment.
The real estate sector weighed more heavily on the index with Dubai-based Emaar Properties and DAMAC Properties retreating 2 per cent and 1.4 per cent respectively.
Abu Dhabi Securities Exchange took a breather after climbing more than 11 per cent this year, and closed the day little changed as real estate and financials moved sideways. Aldar Properties shed 0.6 per cent while Abu Dhabi Commercial Bank gained 0.9 per cent.
Saudi Arabia's main index dropped 0.5 per cent on its fourth straight session of losses. The financial sector dragged the index the most as its largest lender National Commercial Bank retreated 1.7 per cent and Al Rajhi Bank decreased 0.5 per cent.
Qatar Exchange's main index edged down 0.3 per cent, again under pressure from its lenders, while Oman's main index ended lower by 0.5 per cent as investors sold positions in the banking sector.
However, Kuwait-based lenders bucked the trend with all banks advancing after its central bank gave a go-ahead to the lenders on handing out dividends to shareholders. It had earlier stopped Kuwait banks from doing so. Kuwait's premier index gained 0.6 per cent.