Tuesday, May 25, 2010


 
   By Nikhil Lohade 
   Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Gulf stocks plummeted Tuesday in a brutal global markets selloff amid renewed concerns about Europe's debt problems following the rescue of a Spanish bank and mounting tensions on the Korean peninsula. Oil prices tumbled as well, further undermining already fragile sentiment after heavy stockmarket losses in Asia and Europe. Sagging U.S. stock-index futures also point to a significantly lower open for U.S. shares later Tuesday.

"Weak international backdrop once again as Asian markets sell off on heightened tensions in Korea, whilst IMF added fuel to the fire by stating that Spain's financial sector 'remains under pressure'," said a trader at Credit Suisse.

Dubai's benchmark stock index slumped 4.6% to end at 1570.34 and neighbor Abu Dhabi was down 3.1% at 2650.32. Doha's market fell 4.2% to 6647.18; and Kuwait ended down 2.7% at 6802.10. The Saudi Tadawul, the Gulf's largest market, was trading -6.1% at 5799.36 at 1013 GMT.

All markets in the Gulf Cooperation Council region have now wiped out all their previous gains for the year.

In terms of stocks, Dubai bellwether Emaar Properties fell 7.8% to close at AED3.3; Abu Dhabi-based Aldar was down 7.8% at AED3.16. Heavyweight Industries Qatar shed 5% to QAR94.80; and Kuwait's Zain ended -4.4% at KWD1.3. Saudi Basic Industries Corp. or Sabic, the region's largest petchem co. by market value, was trading -7.9% at SAR78.50.

A number of Gulf markets broke below key support levels, after sharp recent declines, magnifying the fall, analysts said. The region's bourses now look oversold however and could rebound in the near term, a Dubai-based research analyst noted.

Crude futures fell below the $70 a barrel level as the euro slid against the dollar and on mounting demand concerns as euro-zone debt problems threaten to slow an economic recovery.

July Brent hit an intraday low of 68.24/bbl earlier Tuesday, the lowest front-month contract price since February 5. July WTI fell to an intraday low of $67.31/bbl, which is the second lowest price since September 2009.

ICE July Brent -246c at $68.71/bbl, Nymex July WTI -253c at $67.68/bbl.

-By Nikhil Lohade, Dow Jones Newswires, +9714 446 1694, nikhil.lohade@dowjones.com

Copyright (c) 2010 Dow Jones & Co.

(END) Dow Jones Newswires

25-05-10 1043GMT