Thursday, Aug 20, 2015
Dubai:
A perfect storm rattled global equity markets along with US oil, which neared the keenly-watched $40 barrel.
Pessimism over global growth along with negative news flow from China amid falling commodity prices rattled world equity markets again, also pushing the Dubai index to its lowest level in five months.
“Jitters from China and oil prices are the two factors weighing on markets,” Muhammad Shabbir, head of equity funds & portfolios at Rasmala Investment Bank told Gulf News.
Dow Jones Industrial average was 0.89 per cent lower at 17,194.29, while S&P 500 index was 0.83 per cent lower at 2,079.61.
Euro STOXX 50 was down 0.89 per cent lower at 3,399.37. The Dubai Financial Market General Index closed 3.22 per cent lower at 3,709.84, after hitting a low of 3,684.99.
However, analysts said a bounce back is likely to be expected next week.
“Whatever correction which had to happen is over, and the current sentiment is the carryover sentiment of margin calls or such things. If nothing serious happens in the international markets, then markets should bottom out at current stage and may witness a bounce back next week,” Shabbir said.
Oil slips:
United States crude oil fell towards $40 a barrel after overnight data surprised analysts with a jump in US oil inventories.
US crude West Texas Intermediate (WTI) hit a low of $40.21 a barrel at 1:40pm local time on Thursday before rebounding to $41.07 at 5:25pm, up 27 US cents or 0.66 per cent. Global benchmark Brent crude fell to a low of $46.35 a barrel before rising to $46.97, down 19 US cents or 0.40 per cent.
US inventory data was “the main catalyst for the big slide” in oil prices overnight, Edward Bell, Commodities Analyst, Global Markets & Treasury at Emirates NBD.
Oil, a major revenue source for the Gulf economies, has lost around 60 per cent of its value since June 2014 when Brent started its fall from around $115 a barrel. Gold rose more than 1.12 per cent on safe haven buying.
By Siddesh Suresh Mayenkar and Alexander Cornwell Staff Reporters
Gulf News 2015. All rights reserved.
