Gulf markets take nosedive over Ukraine crisis
Gulf stock markets slid on Monday as a heightened threat of armed conflict between Ukraine and Russia triggered widespread selling, despite the benefit of higher oil prices to Gulf energy exporters.
Brent crude oil jumped almost $3 to $111.98 per barrel but Asian and European stock markets fell roughly 2 percent or more, prompting retail investors in the Gulf, who have bid their markets up sharply in recent months, to take profits.
Saudi Arabia's bourse, whose heavyweight petrochemical firms stand to benefit the most from any surge in oil prices, slipped 0.8 percent to 9,020 points. The petrochemical sector's index lost 1.0 percent.
"Ukraine is a good pretext to book profits but there's no fundamental reason for the selling pressure," said John Sfakianakis, chief investment strategist at Saudi investment firm MASIC. "I don't see a deep correction as justified, and oil prices going up is a good sign for the region."
Bargain-hunters could be quick to return as soon as military tensions ease, he added.
Dubai's index lost 1.9 percent to trim its 2014 gains to 21.8 percent as it slumped to a two-week low. Abu Dhabi's measure dropped 1.8 percent.
Kuwait's bourse tumbled 1.9 percent to a five-month low as a crackdown by the market regulator on improper trading sparked a sell-off by retail traders in small-cap stocks.
The Kuwaiti Court of First Instance ruled against Ahmed Yousef Behbehani, chairman of Al Ahli Bank, over alleged insider trading in the bank's shares and imposed a fine of 1.5 million dinars ($5.3 million) on him, the bank said in a statement.
Behbehani said he did nothing wrong and will appeal the ruling, the statement said. Shares in Ahli Bank lost 3.5 percent.
"The CMA (Capital Markets Authority) has been active in the last few months and is cracking down on insider and illegitimate trading," said Fouad Abdulrahman Alhadlaq, deputy general manager at Al Dar Asset Management.
"It has suspended a few big speculators and they can't buy and sell in the market."
Speculation in Kuwait tends to focus on small-caps, which are easier to manipulate because of their small free floats.
Kuwait's index ended at 7,494 points, below technical support at the December low of 7,501 points; any close below that level on Tuesday would confirm a break, leaving no major chart support before the September 2013 low of 7,132 points.
In Qatar, Mesaieed Petrochemical, the market's first new listing since 2010, fell by its daily limit of 10 percent for a second straight session. The stock soared 450 percent in its debut last Wednesday on the back of retail investor buying, valuing the stock at nearly three times levels which analysts consider fair.
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