The UAE and GCC markets continued on bleed on Monday, March 9, morning, wiping out billions of dirhams from the regional bourses in the first few minutes trading for the second consecutive day
Dubai bourse plunged nine percent and Abu Dhabi Securities Exchange lost seven percent in the first few minutes of trading on Monday morning as crude crashed over 30 percent amidst fear of oil price war.
Boursa Kuwait also plummeted 9.5 percent while Oman's Muscat Securities Market lost 2.75 percent in the first few minutes of trading. Bahrain bourse was also down three percent in pre-open trading. Kuwait had suspended trading on Sunday after its index plunged 10 percent. It was the second time this month that Kuwait regulator suspended trading of the bourse.
WTI crude plummeted 31.5 percent or $13 a barrel to $28.27 while Brent fell 28.5 percent or $12.9 per barrel to $32.36 on Monday morning.
On Sunday also, the regional bourses recorded massive selloff, pushing markets down to multi-year lows.
Equity investors fear that the oil price war looms after the collapse of Opec+ talks which will push the oil prices down further, putting more pressure on the Oil-exporting GCC countries revenues.
"The failure to reach a deal opens up the possibility of Opec+ countries significantly increasing their output from 1 April. Expectations of a return to an oil price war has increased with Saudi Arabia sharply reducing its official April selling price for its crude grades to all destinations following the Opec+ meeting," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Moreover, Saudi Arabia also reportedly plans to significantly increase output to above 10.0 million bpd in April.
"The low oil price will also have a significant negative impact on GCC fiscal balances, especially for countries with high budget break-even oil prices," she said.
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