Gulf Stocks Drop, Led by Kuwait, on Global Growth Concern, Oil

04/07/2010 00:00 AST

Gulf shares fell for a second day, with Kuwait’s gauge sliding to the lowest since 2004, on concern weak manufacturing data from the U.S. to China will slow the global recovery and as crude lost 8.5 percent last week.

The Bloomberg GCC 200 Index of Gulf stocks dropped 0.9 percent as of 12:17 p.m. in Kuwait. The Kuwait SE Price Index slid 1.9 percent to 6,308.6, the lowest intraday level since November 2004. Mobile Telecommunications Co., the phone company known as Zain, decreased 3.6 percent. Bahrain’s gauge slipped 1.4 percent to 1,360.51, the lowest since at least July 2004, when Bloomberg started tracking the index, led by Arab Banking Corp.

The Standard & Poor’s 500 Index slid to a September low as a gauge of last month’s consumer confidence slumped to a lower level than all projections in a Bloomberg News survey and manufacturing grew at the slowest pace in a year. The Stoxx Europe 600 Index lost the most in six weeks and the MSCI Asia Pacific Index had its fourth weekly decline in five. Manufacturing growth in China slowed more than economists forecast, and a gauge of factory output in the 16-member euro region weakened for a second month, two surveys showed.

“Investors are moving away from risk appetite in line with what’s happening with global markets” and as oil declines, said Haissam Arabi, chief executive officer of Gulfmena Alternative Investments in Dubai. “We expect more downside pressure.”

Crude oil for August delivery lost 8.5 percent last week, dropping to $72.14 a barrel on July 2, the lowest settlement since June 8. The Gulf Cooperation Council, made up of the United Arab Emirates, Qatar, Saudi Arabia, Kuwait, Oman and Bahrain, supply about a fifth of the world’s oil.

Zain fell to 1,080 fils, the lowest since June 20. Arab Banking Corp, the Islamic bank with the third-heaviest weighting on Bahrain’s index, retreated 9.9 percent to 45.5 cents, the lowest since at least February 1997, when Bloomberg began tracking the shares.

In North Africa, Egypt’s EGX 30 Index lost 1.2 percent led by Orascom Construction Industries, the biggest publicly traded builder in the Middle East. Qatar’s QE Indexbenchmark fell 1.2 percent and Saudi Arabia’s Tadawul All Share Index declined 0.4 percent. Oman’s benchmark stock index gained 0.1 percent, Abu Dhabi’s ADX General Index advanced 0.3 percent and Dubai’s DFM General Index increased 0.2 percent.

Israel’s Tel Aviv 25 Index rose 0.1 percent to 1,063.03, the highest since June 30. The 10-year Mimshal Shiklit maturing in January 2020 fell 0.20 shekel to 105.60 at 12:23 p.m. in Tel Aviv. The yield on the 5 percent notes climbed three basis points to 4.54 percent, rising from the lowest level since they were issued. The shekel strengthened 0.2 percent to 3.8905 per dollar on July 2.

Bloomberg