Arab Socks Plunge Heavily After US, Chinese Equity Sell-Off
Aug, 24th 03:20
Stock markets in the petrodollar-dependent Persian Gulf tumbled Sunday to multimonth lows, spooked by sharply lower oil prices and a global equities selloff on growing concerns about China’s economy.
Saudi Arabia, the Middle East’s biggest market, led the regionwide decline to finish the day nearly 7% lower. Dubai stocks dropped by a similar percentage, while regional peers Abu Dhabi and Doha’s markets both fell 5% each to extend recent losses.
The Gulf meltdown followed a U.S. equity selloff Friday, the worst in four years, after new Chinese data raised more questions about the health of the world’s second-biggest economy, and whether this would impact global growth. And a potential slowdown in Chinese demand for commodities dragged oil prices lower amid increasing consensus that cheap crude is here to stay.
For the Gulf nations, which largely depend on energy exports to finance their expansionary spending plans at home, the weak outlook for oil further aggravated a recent sell-down of risk in the region.