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Gulf Stock Markets Experience a Drop Due to Contagion Concerns from US Bank Failures

Most Gulf stock markets closed in lower today, Tuesday, as financial markets were hit by fears of contagion from the collapse of banks following the collapse of US Silicon Valley Bank.

The currencies of most Gulf countries are pegged to the dollar, and Qatar, Saudi Arabia and the United Arab Emirates usually follow suit with any change in monetary policy in the United States.

The Saudi stock market index fell 1% at the close, impacted by a 0.8% decline in Retal Urban Development’s share and Al-Rajhi Bank’s share of 1.1%, according to Reuters.

Reuters quoted an informed source as saying on Monday that Boeing is expected to sell about 80 787 Dreamliners to two Saudi airlines.

And the share of Saudi Basic Industries Corporation “SABIC” dropped by 2.7%.

The Dubai index fell 1.5%, continuing losses for the fifth session, with the Dubai Islamic Bank in drop of 3.6%.

The Abu Dhabi index fell 1.8%, led by a 2.7% decline in First Abu Dhabi Bank, the largest bank in the UAE.

ADNOC Gas fell 0.4%, on the day after jumping more than 18% from its quoted price in its first trade on the market.

ADNOC Gas closed at 2.81 dirhams ($0.7651) per share, compared to an initial public offering price of 2.37 dirhams.

Farah Murad, market analyst senior in XTB’s Middle East and North Africa division, said uncertainty in the US banking sector and the resulting drop in oil prices have prompted a price correction in the Abu Dhabi stock market.

Qatar’s index fell 1.9% at the close.

Oil prices, a major stimulus for Gulf financial markets, fell by more than $2 a barrel, exacerbating the previous day’s decline after the Silicon Valley bank crash shook stock markets and raised fears of a new financial crisis.

Outside the Gulf region, Egypt’s blue-chip index fell 0.5%, with Commercial International Bank in 2% drop.


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