REUTERS – Saudi Arabia’s stock market fell on Sunday, in line with most Gulf markets, after the U.S. Pentagon approved the deployment of a warship and Patriot missiles to the Middle East.
The Tadawul All-Share Index was at its lowest level since the end of March. The benchmark is down almost 7 percent this month.
“The increased military tension between the U.S. and Iran are pressuring markets down,” said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital in Abu Dhabi.
The U.S. military said last week that a number of B-52 bombers would be part of additional forces being sent to the Middle East following troubling indications of possible preparations for an attack by Iran.
Talal Samhouri, head of asset management at Amwal in Doha said the Saudi drop was mostly due to bearish sentiment surrounding Iran tensions and Chinese trade tensions with the U.S.
“Negative sentiment is clouding the bullish expectations for foreign fund inflows coming from the MSCI inclusion,” he said, referring to the incorporation of Saudi stocks into the index compiler’s emerging index later this month.
Dubai’s index was down 0.5 percent.
For every stock that rose, almost three declined on the Dubai Financial Market exchange.
“The U.S. navy is sending their ships towards the region which is a concern for any investors who are looking to trade in a low liquidity environment,” Tariq Qaqish, managing director, asset management division, Mena Corp Financial Services said.
“Although the large caps are trying to hold the indices, the small companies are being hammered,” Yasin said.
And in Kuwait, the Premier market index was down 2.3 percent.
Qatar’s index was down one percent with heavyweight stocks Commercial Bank and Qatar Gas Transport Company falling 2.5 percent and 3.2 percent, respectively. ($1 = 3.7503 riyals)