Qatari stocks tumble on fresh oil drop

(MENAFN- The Peninsula) Qatari stock market took a nosedive yesterday, after US crude futures slipped and Brent edged down. The Qatar Exchange (QE) benchmark index plunged 2.23 percent, the worst drop of the year, extending the bourse's losing streak to sixth straight session.

Oil price volatility is continuing to drive the stocks and it will remain volatile for a while, analysts told The Peninsula.

"Short lived oil price recovery is the main reason for decline in stocks over the past week. After its initial drop from around $100 per barrel to below $50, Brent oil had recovered briefly to around $63 in February. But this recovery proved very short term, declining back to $53 currently", Afa Boran, Head of Asset Management, Amwal commented.

The energy-related Gulf International and MPHC were the worst hit. Gulf International tumbled 4 percent and MPHC was hammered by 3.18 percent. As a whole, the pack of industrials stock plummeted 2.42 percent.

Amwal expects price of oil to remain volatile, particularly as companies report surprise Q1 profits. This will affect stocks.

Even if oil stays at around $50 levels, many businesses will continue to strive, but stock selection is key particularly in times like these.

"Yesterday we witnessed shares drop by as much as 5 percent while other stocks preserved their value, it pays to do bottom's up analysis on the company, its management and the sector.", Afa said.

Industries Qatar, which has one of the biggest weighting in the index, closed 2.32 percent down at QR134.50. Banking major QNB, whose credit rating has been upgraded by Fitch yesterday, tumbled 2.94 percent to QR188.30.

In six straight bearish run, the market cap was squeezed by QR45bn. Property-related shares took a beating across the sector with Barwa performing the worst. The shares of Barwa were battered by 5.11 percent and UDC lost 2.68 percent. Of the 38 companies traded, just one advanced, 35 declined and two closed unchanged. About 8 million shares worth QR380m were traded. Islamic lender Masraf Al Rayan was the active volume leader, while Barwa was the value leader.

Elsewhere, Saudi Arabia main index, which has the heaviest weighting of petrochemicals among the Gulf markets, fell 1.8 percent to 9,134 points, although it closed comfortably above its intraday low of 8,888 points. Saudi Basic Industries, the region's biggest petrochemical firm, tumbled 4.8 percent in its heaviest trade in five months. Prices for many of its products are linked to oil prices, Reuters reported. Dubai's index dropped 3.6 percent to a 10-week low of 3,408 points. All major stocks fell sharply and only a handful of small-caps closed higher. Abu Dhabi's fell 1.2 percent.The Peninsula