Gulf markets ended lower on Monday as investor worries grew about a possible Greek default amid signs of rifts among eurozone policymakers, with Saudi Arabia's bourse leading the decline on a tight correlation to oil prices. Lingering fears the US economy may be heading into a double-dip recession exacerbated global sentiment.
World shares tumbled nearly 2 percent on Monday with European equities at 26-month lows, down more than 20 percent this year. Brent crude oil fell as much as $2.35 per barrel to a low of $110.42 but then recovered some ground to trade around $111.40 by 1000 GMT. Saudi Arabia's index slumped 1.7 percent to its lowest close since August 24 and extended its 2011 losses to 8.8 percent.
Newly listed Integrated Telecom Company tumbled 7.4 percent and was the most traded stock. Alimna Bank dropped 1.1 percent and bellwether Saudi Basic Industries Corp (SABIC) fell 2.9 percent. Some analysts expect corporate earnings in the second-half to be an improvement over the first half.
Egypt's main index lost 1.7 percent as investors remained worried by a foggy political future. A weekend of protests against Israel and clashes with police continued to dampen appetite. Private equity firm Citadel Capital, one of the most traded stocks on Monday, closed down 3.6 percent. The firm said on Sunday it had completed a $70 million capital increase for its platform company Africa Railways. Orascom Telecom shed 5.1 percent, while Orascom Construction, slipped 3.4 percent and landline monopoly Telecom Egypt lost 1.8 percent.
In Dubai, shares slumped to a three-week low and top traded stocks, the main targets for retail investors who try to profit in short-term trading, headed losers. Emaar Properties and builder Arabtec fell 1.4 and 2.2 percent respectively, while contractor Drake & Scull dropped 2.1 percent. The trio accounted for nearly half the total shares changing hands on the index.
Dubai's benchmark declined 0.9 percent to its lowest close since August 24. Elsewhere, Doha's bourse slipped 1 percent, taking its year-to-date losses to 3.6 percent, the top performing Gulf Arab benchmark. Qatar's stocks have proved more resilient because of the country's robust economy, which is forecast to grow 16.7 percent in 2011. In Doha, losers outnumbered gainers 16 to three. Heavyweight Industries Qatar slipped 1.7 percent and Qatar National Bank fell 0.6 percent.
"The banking sector is the most eyed in Qatar, as well as petrochems like IQ. Qatar's petrochems are the most attractive in the region at current prices," Shurrab said. In Oman, Renaissance Services fell after warning it will be tough to recover the $2.9 million lost in fraud at its marine unit Topaz and most Muscat shares end lower. The oil services firm, the third-most active stock on the bourse, closed 0.7 percent lower and is down about 38 percent in 2011.
Kuwait's logistics operator Agility extended gains for a second day since Kuwaiti newspaper al Qabas said the company may try to buy into the privatisation of state-owned Kuwait Airways. It bucked the market trend and surged 8.5 percent to its highest close since July 14.
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