Mideast Stocks: Gulf financial stocks hardest hit by falling oil prices

FAB denies merger talks with Abu Dhabi Islamic Bank

  
Stock traders Haitham Rashean(R) and Lupna Saleh work in the stock exchange November 4, 2002 in Manama, Bahrain.

Stock traders Haitham Rashean(R) and Lupna Saleh work in the stock exchange November 4, 2002 in Manama, Bahrain.

Getty Images/Joe Raedle

Most stock markets in the Gulf ended lower on Thursday, pressured by banking shares, weakening in response to a fresh drop in oil prices as new lockdown measures threaten demand recovery for the region's top export.

Brent crude  futures dropped $1.48, or 3.42% to $41.84 a barrel at 1243 GMT, as new restrictions to stem a surge in COVID-19 infections have increased uncertainty over the outlook for economic growth and a recovery in fuel demand. 

Saudi Arabia's benchmark index dropped 0.5% with Al Rajhi Bank down 0.9% and National Commercial Bank (NCB) retreated 1%.

NCB, the kingdom's largest lender, gained in the previous three sessions after it entered a binding merger agreement with smaller lender Samba Financial Group

Global oil stocks which rose during the height of the pandemic are being steadily reduced, the International Energy Agency (IEA) said on Wednesday, but a second wave is slowing demand and will complicate efforts by producers to balance the market.

Lower prices and disruptions to crude exports could worsen fiscal balances in countries reliant on oil income.

Dubai's main share index fell 1.1%, with Emirates NBD Bank shedding 2.9% and blue-chip developer Emaar Properties losing 1.5%.

The Abu Dhabi index eased 0.4%, weighed down by a 1.4% fall in First Abu Dhabi Bank (FAB).

On Wednesday, the United Arab Emirates' largest lender denied a local news report it was in merger talks with Abu Dhabi Islamic Bank.

Shares of Abu Dhabi Islamic Bank rose 1.9%.

Qatar's benchmark fell 0.3%, hurt by a 0.9% drop in Qatar National Bank and a 0.6% decline in petrochemical firm Industries Qatar.

Outside the Gulf, Egypt's blue-chip index closed down 0.1%, with tobacco monopoly Eastern Company dropping 1.9%.

(Reporting by Ateeq Shariff in Bengaluru Editing by Tomasz Janowski) ((AteeqUr.Shariff@thomsonreuters.com; +918067497129;))

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