Most Gulf bourses tumble as Omicron spooks investors

Nov 28 (Reuters) – Most Gulf stock markets ended lower on Sunday, with the Saudi and Dubai indexes suffering their biggest single-day fall in nearly two years as fears of a potentially vaccine-resistant coronavirus variant spooked investors.

The World Health Organization (WHO) on Friday designated the Omicron coronavirus variant detected in South Africa as being “of concern” – the fifth variant to be given that designation. read more

Saudi Arabia’s benchmark index (.TASI) slid 4.5%, dragged down by a 5.4% fall for Al Rajhi Bank (1120.SE) and a 6.2% decline for Saudi Basic Industries (2010.SE).

The kingdom halted flights from and to Malawi, Zambia, Madagascar, Angola, Seychelles, Mauritius and the Comoros Islands on Sunday owing to concerns related to the spread of the new COVID-19 strain, state news agency SPA reported on Twitter. read more

The latest panedmic developments also sent oil prices, a key catalyst for the Gulf’s financial markets, plunging by $10 a barrel on Friday for their largest one-day drop since April 2020. The new variant added to concerns that an oil supply surplus could swell in the first quarter.

“Despite the previous positive experience of quick recovery in the oil market, investors should keep an eye on news of large-scale lockdowns in the short term,” sais Farah Mourad, senior market analyst at XTB MENA.

Dubai’s main share index (.DFMGI) declined 5.2%, its biggest intraday fall since March 2020, with most stocks in negative territory.

Blue-chip developer Emaar Properties (EMAR.DU) plunged 9.4%and budget carrier Air Arabia (AIRA.DU) retreated by 7.1%.

In Abu Dhabi, the index (.ADI) fell 1.8%, weighed down by a 3.3% drop for telecoms company Etisalat (ETISALAT.AD) and a 1.4% decline for First Abu Dhabi Bank (FAB.AD), the country’s largest lender.

The United Arab Emirates has suspended entry for travellers from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe, Botswana and Mozambique from Nov. 29 over concerns about the new coronavirus variant, the state news agency reported on Friday. read more

Even with new treatments for coronavirus infections, health care systems can be overwhelmed by rising cases, leaving governments with little option but to reimpose restrictions that would slow growth or even push economies back into recession. At the same time, those restrictions could worsen supply chain disruptions, adding to inflationary pressure even as growth slows, said Khatija Haque, head of research and chief economist at Emirates NBD.

In Qatar, the index (.QSI) slipped by 2.8% as investors shunned stocks across board, with petrochemicals group Industries Qatar (IQCD.QA) leading the losses.

Egypt’s blue-chip index (.EGX30) lost 1.3%, with top lender Commercial International Bank (COMI.CA) retreating by 0.8%.

Reporting by Ateeq Shariff in Bengaluru
Editing by David Goodman

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