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Middle Eastern bourses looking weaker as poor earnings join negative backdrop
Stock markets in the Middle East are eyeing another weak performance on Thursday, with global equities on the slide along oil prices, and after two of the region’s largest banks posted lower profit in the third quarter.
European stocks fell 3.2% on Wednesday, the biggest one-day fall in nearly four years. The S&P 500 Index fell to its lowest in eight months, and Asian shares followed suit as each day puts more concerns on the global growth outlook amid the ongoing uncertainty dominating the market.
Brent crude stood below $83 a barrel on Thursday, with the U.S. dollar rebounding. The Saudi Petrochemicals sector has fallen 11.3% this week.
Although economies in the Gulf can offset the effect of lower prices considering their massive fiscal reserves, there has been a traditional correlation with global oil prices. A worry over China’s economic growth is also a large factor for declining petrochemicals.
Banking shares are expected to decline today after two of the biggest lenders reported weak quarterly results. The National Bank of Kuwait reported a 15.6% drop in third-quarter net income, greatly below market estimates.
Saudi Arabia’s biggest bank by market value, Al Rajhi Bank reported a 3.2% fall in profit to SAR1.66 billion ($442.6 million), missing expectations of SAR1.9 billion.
The Dubai Financial Market (DFM) on Wednesday fell below its 200-day moving average for the first time since the bull market’s began in 2012, a pessimistic technical signal for the long term.
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