Middle East stocks took their cue from last week’s global sell-off as the emergence of a worrying new coronavirus variant reverberated through markets, sending every major index into retreat.
Dubai’s benchmark gauge dropped the most, tumbling 5.2 percent as of 3:40 p.m. local time, its sharpest loss since March 2020. Saudi Arabia’s main index fell 4.2 percent, the most since October 2020. There were declines in Israel, Egypt, Jordan, Kuwait, Qatar and Abu Dhabi.
Coming in the wake of Friday’s worldwide slump, the declines across the energy-rich markets of the Gulf threatened to undo some of the gains made this year amid a flurry of initial public offerings and a rally in oil prices. Brent, the benchmark grade for more than half the world’s oil, lost almost 12 percent Friday on concern the new Omicron Covid-19 variant will usher in fresh lockdowns and crimp air travel.
“We are going to mimic the sell-off we have seen in the global markets today. I don’t think it’s a surprise,” Ahmed Badr, head of the Middle East and North Africa at Credit Suisse AG in Dubai, said in a Bloomberg TV interview before markets began trading Sunday. “The question is how long” it will last and “what kind of opportunities it’s going to present in terms of buying opportunities,” he said.
As governments around the world announced measures to limit the variant’s spread, Israel on Saturday banned foreigners from entering the country for two weeks, while Saudi Arabia and the UAE suspended flights to and from South Africa – where omicron was first identified – as well as some other nations on the African continent.
The emergence of the omicron variant added a fresh ingredient to what was already stacking up to be a critical week for investors, with US jobs data scheduled for release on Friday and the OPEC+ oil-producer group due to decide Thursday whether to enact a planned 400,000 barrel-a-day increase in output.
Mike Muller, the head of the Asia unit at Vitol, the world’s biggest independent oil trader, said Sunday he expects OPEC+ to take a cautious stance when it meets, amid signs that demand may be weakening in some markets going into the winter months in Asia and Europe.
Dubai-listed Shuaa Capital PSC and Amlak Finance were the biggest losers in the Middle East region Sunday, slumping 10 percent each. In Saudi Arabia, Nama Chemicals Co. dropped the most, retreating 8.5 percent.
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