Persian Gulf stocks fall to multi-year lows as oil price slumps

Stock prices in the energy-rich Persian Gulf states have fallen to multi-year lows after oil prices in global markets closed at below $38 a barrel, marking the lowest rate in seven years.

The stock price fall was led by markets in the United Arab Emirates and Saudi Arabia, where share prices plunged below key resistance points on Sunday amid a sell-off by concerned investors, AFP reported.

On Friday, crude oil prices nosedived, with North Sea Brent dropping 4.5 percent to stand at $37.93 a barrel and West Texas Intermediate shedding 3.1 percent to hit $35.62 a barrel.

The development came as Persian Gulf states, which produce over 18 million barrels of oil per day, are heavily dependent on oil revenues to cover public expenditure.

The Saudi Tadawul All-Shares Index (TASI), which is the largest Arab bourse, dropped 2.65 percent to 6,764.60 points, which marked its lowest close since November 2012. TASI has lost 18.8 percent since the start of the current year.

As trading continued, TASI slid further during the day but recovered before markets closed.

Meanwhile, the Dubai Financial Market Index fell 2.1 percent to finish on 2,882.80 points, marking a two-year low. The index has dropped 23.6 percent since the start of the year.

Abu Dhabi Securities Exchange also lost 2.1 percent to close barely above the 4,000-point mark. It is currently trading 12 percent lower than at last year's finish.

Qatar Exchange, which is the second largest Arab bourse, lost 3.7 percent to close at 9,643.65 points, which has been its lowest level since September 2013. In comparison to last year, it has shed 21.5 percent.

The Kuwait Stock Exchange recorded a three-year low by dropping 0.93 percent to 5,633.28 points. It has lost 13.8 percent on the year.

Muscat Securities Exchange also slid 0.66 percent to 5,414.99 points, marking a 12-month low, while the tiny Bahrain Stock Exchange dropped slightly.

Since Persian Gulf governments have taken measures to cut capital spending, private companies have been feeling the heat as they are heavily dependent on state capital spending.

The decline in Persian Gulf markets followed a global shares rout on Friday due to low oil prices.

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