Gulf stocks buck trend reverse losses

4/18/2016 11:33:29 PM

(MENAFN- Khaleej Times) Gulf stocks on Monday reversed losses as oil pulled back from its biggest drop since February following the failure of major crude producing countries to agree an output freeze over the weekend.

The Bloomberg GCC 200 Index which tracks the biggest and most liquid shares inthe six-nation GCC added less than 0.1 per cent at 3:12pm in Riyadh after dropping as much as one per cent as Brent crude plunged seven per cent.

A summit in Doha ended without a deal after Iran didn't attend and Saudi Arabia said it wouldn't agree caps without them. Oil pared its decline to 3.3 per cent.

The DFM General Index which earlier dropped as much as 2.5 per cent closed 0.1 per cent higher. Abu Dhabi's ADX General Index reversed losses to add less than 0.1 per cent.

Qatar's QE Index rose 0.4 per cent. Oman's MSM 30 Index slid 1.3 per cent the most in more than two weeks. Saudi Arabia's Tadawul All Share Index added 0.2 per cent moving closer to a bull market. Bahrain's BB All Share Index gained 0.3 per cent.

Markets are back to being "fully correlated to oil movements" said Tariq Qaqish the Dubai-based head of asset management at Al Mal Capital.

"Fears for oil prices in the long term will cause concern for investors. We need to see a quick drop and a rebound" he added.

Global markets

World equity markets slid on Monday with the energy sector taking a tumble as oil prices tanked following the collapse of weekend output talks in Doha.

"Discord in Doha has left oil prices weaker and has prompted a drop across European equity markets" said CMC Markets analyst Jasper Lawler.

US stocks were lower on Monday as crude prices slipped. Morgan Stanley barely rose to $25.85 after the Wall Street bank's quarterly profit halved but came above estimates. Hasbro jumped 5.3 per cent to $86.81 after the toymaker reported better-than-expected quarterly profit and revenue.

Frankfurt London and Paris all shed more than one per cent in opening deals but later tempered their losses.

In Asia Hong Kong ended 0.7 per cent lower Shanghai closed down 1.4 per cent Seoul sank 0.3 per cent and Singapore slipped 0.7 per cent. Tokyo's Nikkei closed 3.4 per cent lower with earthquake worries also hitting sentiment.

Russia's stock markets tumbled as the Doha news appeared to spell more trouble for the country's energy-reliant economy. Moscow's RTS index was down over four per cent in early trade before recovering slightly.

"Equities and oil have more or less traded in lockstep in 2016 so the failure of Doha talks at the weekend and the resulting weakness in the price of oil are unlikely to be taken well by the market as a new week of trading begins" said Russ Mould investment director at brokerage AJ Bell.

"BP and Shell were early and inevitable casualties as investors reacted to the fall in oil prices."

In London BP's share price slid 1.15 per cent to 351.85 pence in midday trade while Royal Dutch Shell's 'A' stock was down 1.65 per cent at 1784 pence.

In Paris French oil and gas giant Total topped the fallers board dropping 1.72 per cent to stand at ?41.82.

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