Saudi Arabia’s stock market fell on Sunday, in line with most Gulf markets, after the US Pentagon approved the deployment of a warship and Patriot missiles to the Middle East.
The Tadawul All-Share Index was down 1.8 per cent to 8,699 points, its lowest level since the end of March. The benchmark is down almost 7 per cent this month.
“The increased military tension between the US and Iran are pressuring markets down,” said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital in Abu Dhabi.
The US military said last week that a number of B-52 bombers would be part of additional forces being sent to the Middle East.
Talal Samhouri, head of asset management at Amwal in Doha said the Saudi drop was mostly due to bearish sentiment surrounding Iran tensions and Chinese trade tensions with the US.
“Negative sentiment is clouding the bullish expectations for foreign fund inflows coming from the MSCI inclusion,” he said, referring to the incorporation of Saudi stocks into the index compiler’s emerging index later this month.
Dubai’s index was down 0.5 per cent, weighed by its largest lender Emirates NBD which slipped 0.2 per cent.
“The US navy is sending their ships towards the region which is a concern for any investors who are looking to trade in a low liquidity environment,” Tariq Qaqish, managing director, asset management division, Mena Corp Financial Services said.
For every stock that rose, almost three declined on the Dubai Financial Market exchange.
“Although the large caps are trying to hold the indices, the small companies are being hammered,” Yasin said.
And in Kuwait, the Premier market index was down 2.3 per cent.
The Abu Dhabi index rebounded with a rise of 0.6 per cent, boosted by banking stocks. First Abu Dhabi Bank was up 0.9 per cent, while Abu Dhabi Commercial Bank was up 1.6 per cent.
However, Waha Capital was down 0.1 percent after the investment firm reported a net loss of 57.8 million dirhams due to a revaluation of its investment in global aviation leasing firm Aercap. Dana Gas, a Sharjah-based gas explorer and producer, was down one percent.
Qatar’s index was down one percent with heavyweight stocks Commercial Bank and Qatar Gas Transport Company falling 2.5 percent and 3.2 percent, respectively.
