Ukraine crisis hits Middle East markets

File - Traders work at the Egyptian stock exchange in Cairo August 18, 2013. (REUTERS/Louafi Larbi)

DUBAI: Middle Eastern stock markets slid Monday as a heightened threat of armed conflict between Ukraine and Russia triggered widespread selling, despite the benefit of higher oil prices to Gulf energy exporters. The price of Brent crude oil jumped almost $3 to $111.98 per barrel, but Asian and European stock markets fell by roughly 2 percent, prompting Gulf retail investors, who have been bidding their markets up sharply in recent months, to take profits.

Cairo’s benchmark index slid 2.7 percent, down for a second straight session from last week’s 65-month high, trimming its 2014 gains to 15.9 percent.

Saudi Arabia’s bourse, where heavyweight petrochemical firms stand to benefit most from any surge in oil prices, slipped 0.8 percent. The petrochemical sector’s index fell 1 percent.

“Ukraine is a good pretext to book profits but there’s no fundamental reason for the selling pressure,” said John Sfakianakis, chief investment strategist at Saudi investment firm MASIC.

“I don’t see a deep correction as justified, and oil prices going up is a good sign for the region.”

Bargain-hunters could nonetheless be quick to return if the military tensions in Ukraine were to ease, Sfakianakis added.

Dubai’s index lost 1.9 percent, trimming its 2014 gains to 21.8 percent as it slumped to a two-week low. Abu Dhabi’s measure dropped 1.8 percent.

Kuwait’s bourse fell 1.9 percent to a five-month low as a crackdown by the market regulator on improper trading sparked a sell-off by retail traders in small-cap stocks.

Speculation in Kuwait tends to focus on small-caps, which are easier to manipulate because of their small free floats.

Kuwait’s index ended at 7,494 points, below technical support at the December low of 7,501; any close below that level Tuesday would confirm a break, leaving no major chart support before the September 2013 low of 7,132.

In Qatar, Mesaieed Petrochemical, the market’s first new listing since 2010, fell by its daily limit of 10 percent for a second straight session.

The stock soared 450 percent in its debut last Wednesday on the back of retail investor purchases, valuing the stock at nearly three times levels that analysts considered to be fair.

A version of this article appeared in the print edition of The Daily Star on March 04, 2014, on page 5.




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