Gulf shares tumble along with oil prices

Gulf shares tumble along with oil prices
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Oil prices at fresh five-year lows continue to hit Middle Eastern stock markets.

Dubai’s main share index posted its biggest daily drop in six years on Thursday – down 7.4 percent.

Abu Dhabi’s loss – 4.7 percent – was the worst in five years as panic selling spread across the Gulf.

Oman’s bourse lost 4.2 percent and Qatar was down 4.3 percent.

The benchmark Brent crude has fallen more than 40 percent from its high back in June.

It briefly managed to climb back above the $65 a barrel mark on Thursday only to reverse course slipping below $64.

Economists do not expect growth in the big Gulf economies to be seriously hit if oil stays at current levels as the region’s governments have huge cash reserves that they can use to maintain spending.

But oil’s quick drop is having a psychological impact on the small investors who dominate trading in the Gulf markets and who want to lock in profits after big gains in the past 18 months.

In Dubai in particular, investors are likely to have been selling to raise money to repay bank loans which they took out to buy shares as they were going up in price.