Middle East stock markets plunge on US downgrade
The US rating downgrade sparks immediate declines in the Middle East's financial markets as concerns rise over the state of the global economy
Ahram Online, Sunday 7 Aug 2011
The effects of the US debt crisis began to spread on Sunday with Middle Eastern financial markets plunging following the downgrade of the US’s long time AAA credit rating to AA+ by Standard’s and Poor late last week.
Investors rushed to trade their stocks under increasing global financial pressures as exchanges across the region reopened after the weekend.
EGX30 -- the Egyptian Bourse benchmark -- dropped over 4 per cent, bringing its year-to-date losses to more than 32 per cent. The exchange finished trading down 4.17 per cent.
In early trading, the Dubai Financial Market’s index plunged more than 5 per cent before rebounding slightly, its losses dampened to 4.4 per cent by closing.
Dubai’s leading real estate and world’s tallest tower developer, Emaar Properties, slumped 5.26 per cent.
Shares in Emirati construction giant Arabtec Holding also saw a 6.29 per cent drop.
Following an early plunge of 5.46 per cent, Saudi Arabia managed to balances it losses with its benchmark index closing up a tiny 0.08 per cent.
The plunge in Saudi markets was balanced by shares in the petrochemical and banking sectors. The former declined 0.26 per cent, led by an identical fall for industry giant Saudi Basic Industries Corp (SABIC).
The banking index increased 0.27 per cent owing to gains of 1.1 per cent by the Kingdom’s well-established Al-Rajhi Bank.
The ADX General Index (ADSMI) on Abu Dhabi Securities Exchange fell 2.53 per cent by closing bell. The banking index and real estate index shed 3.30 per cent and 5.61 per cent respectively.
On opening trading session, the Qatar Exchange (QE) slumped 3 per cent and closed trading down 2.51 per cent.
Tumbling 6 per cent during pre-opening trade, the Tel Aviv Stock Exchange decided to delay the week’s first session opening by an hour in fear of a further plunge of the Israel’s benchmark stock index.
The 6.04 per cent drop of the TA-25 index is said to be its lowest in almost three years.