Gulf stocks slide as oil prices extend losses

·2 min read
Gulf bourses tumble in the energy-rich Gulf region where Arab states have taken unprecedented steps including closing borders and shutting restaurants to fight against the spread of the coronavirus (AFP Photo/FAYEZ NURELDINE)
Gulf bourses tumble in the energy-rich Gulf region where Arab states have taken unprecedented steps including closing borders and shutting restaurants to fight against the spread of the coronavirus (AFP Photo/FAYEZ NURELDINE)

Dubai (AFP) - Gulf stock markets tumbled Monday in tandem with oil prices amid unprecedented measures against the coronavirus and as Bahrain became the first Arab Gulf country to record a death from the disease.

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 percent and Dubai by 6.2 percent, both hitting multi-year 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 5.0 percent.

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

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

The Bahrain bourse slipped 1.4 percent and the Muscat market ended 1.8 percent 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 states 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 percent.

Qatar cut its lending rate by 100 basis points to 2.5 percent and Bahrain also reduced its main interest rate from 1.75 percent to 1.0 percent.

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

The six member states of the Gulf Cooperation Council -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates -- have taken unprecedented measures to combat the coronavirus pandemic, including halting flights, closing borders, restricting travel and shutting all entertainment facilities.

Bahrain on Monday became the first GCC member to report a death due to coronavirus.

The 65-year-old woman had pre-existing medical conditions, the health ministry said.

Nearly 1,000 cases of the virus have been recorded so far across the GCC region.

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

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