Gulf stocks slide as oil prices extend losses

DUBAI — Gulf stock markets tumbled in tandem with oil prices on Monday. 

Oil prices, the main source of Gulf revenues, skidded to a four-year low amid demand worries and a price war between Russia and Saudi Arabia, the second and third top world producers.

Gulf stocks slumped despite a slew of interest rate cuts announced by central banks in the region, on the heels of stimulus packages unveiled by Saudi Arabia, the UAE and Qatar worth tens of billions of dollars.

Abu Dhabi dived by 7.8 per cent and Dubai by 6.2 per cent, both hitting multiyear lows, despite a $27.2 billion stimulus package recently announced by the UAE central bank.

Boursa Kuwait continued to bleed with the Premier Index sliding 5 per cent.

The Saudi Tadawul market, the region’s biggest, dropped 5.2 per cent despite a $13.3 billion stimulus announced by the kingdom to support the economy.

Shares in Saudi energy giant Aramco dropped 3.1 per cent, a day after it reported a 20.6 per cent fall in net profit in 2019.

The Bahrain bourse slipped 1.4 per cent and the Muscat market ended 1.8 per cent down.

Qatar Stock Exchange bucked the trend for the second day after the gas-rich emirate announced a $23 billion stimulus that includes $2.7 billion to support the stock market.

Four of the six Gulf countries followed the US Federal Reserve by making deep cuts to their main interest rates to stimulate the economy.

Saudi Arabia cut its Repo rate, its main interest rate, by 0.75 percentage points to 1.75 per cent.

Qatar cut its lending rate by 100 basis points to 2.5 per cent and Bahrain also reduced its main interest rate from 1.75 per cent to 1 per cent.

Kuwait Central Bank cut its main discount rate by 100 basis points to 1.5 per cent, its lowest ever.

Oil prices extended losses on Monday with US benchmark West Texas Intermediate (WTI) slumping below $30 a barrel, down 5.7 per cent.

Benchmark Brent North Sea crude was down 9.6 per cent at $30.60 a barrel.