Saudi Arabia, Oman shares lead Gulf drop as global markets fall

Saudi Arabia and Oman shares retreated for a second day, leading Gulf markets lower, as an unexpected decline in US home sales raised concern about the stability of the global economic recovery.

The Tadawul All Share Index dropped 0.6 per cent to 6,326.13, the lowest level in a week at 11:26 a.m. in Riyadh, as Saudi Basic Industries Corp., the world’s largest petrochemical maker known as Sabic fell. Oman’s MSM30 Index lost 0.7 per cent to 6,171.56 as Bank Muscat SAOG, Oman’s biggest bank by assets, retreated. The Bloomberg GCC 200 Index slid 0.5 per cent.

“Correlation is running high with what’s happening globally,” said Haissam Arabi, chief executive officer of Gulfmena Alternative Investments in Dubai. “Investors are trying to reduce risk ahead of a long summer.”

The MSCI Asia Pacific Index dropped the most in two weeks and the MSCI Emerging Markets index lost 0.7 per cent. The Standard & Poor’s 500 Index declined the most since June 4 yesterday after the National Association of Realtors said purchases of existing homes fell to a 5.66 million annual rate. Sales were expected to rise to a 6.12M rate, according to the median forecast of economists in a Bloomberg News survey.

Sabic decreased 1.9 per cent to 90 riyals, the lowest since June 13. Bank Muscat dropped to 0.806 rial.

Abu Dhabi’s ADX General Index rose less than 0.1 per cent. Dana Gas PJSC gained 1.5 per cent to 70 fils, the highest in more than two weeks, after the explorer and producer said its board approved buying back as much as 10 per cent of the company’s shares and an additional budget for ventures in the United Arab Emirates and Egypt.

The QE Index dropped 0.4 per cent led by Qatar National Bank, the Gulf country’s biggest lender. Dubai’s DFM General Index fell 0.2 per cent and the Kuwait Stock Exchange Index slid 0.3 per cent. Bahrain’s measure gained 0.4 per cent to the highest since June 10.