Oil prices tumble 7%: Tadawul edges down

02/09/2015 04:59 AST

Stock markets across the Middle East fell on Tuesday alongside steep drops in global stock prices because of renewed uncertainty about the state of China's economy. Stock markets fell after data showed China's manufacturing activity had contracted in August at its fastest pace in three years, reinforcing fears of a slowdown in the world's second-largest economy despite a flurry of government support measures.

Oil prices tumbled 7 percent on Tuesday and Brent futures fell back below $50 a barrel. Brent crude was down $4.08 at $50.07 a barrel at 12:09 p.m. EDT (1609 GMT) having fallen as low as $49.72.

US crude was down $3.59 at $45.61, having slumped as low as $45.22. Monday's gains were 8.8 percent. The CBOE's crude oil volatility index rose by nearly 10 percent intraday on Tuesday, trading at its highest since March.

Saudi Arabia's main Tadawul All-Share Index fell 1.1 percent to 7,438 points with all sectors in the red. China is the second-biggest market for the Kingdom's exports and a hard landing for its economy would have a big impact on Saudi Arabia.

National Shipping Company of Saudi Arabia (Bahri), which is the exclusive oil shipper for Saudi Aramco and also handles oil products and petrochemicals, tumbled 4.4 percent. Large banks National Commercial Bank and Al-Rajhi fell 1.0 and 1.7 percent respectively after credit rating agency Fitch revised its outlook on their ratings to negative from stable, following a similar revision for the sovereign's outlook last month.

Dubai's benchmark dropped 2.1 percent to 3,585 points in another broad sell-off which affected all sectors. Abu Dhabi's bourse fell 2.6 percent to 4,375 points. Qatar's index was down 1.3 percent to 11,415 points. Ezdan Holding and Commercial Bank of Qatar dropped 2.6 percent each on profit-taking after surging in the run-up to the rebalancing of MSCI's emerging markets index, which increased the two stocks' weightings at the end of Monday.

Egyptian stocks were down 0.7 percent after a 2.8 percent jump the previous day triggered by the discovery of a potentially huge gas field off the country's Mediterranean coast. Ezz Steel, which analysts say could be one of the biggest beneficiaries if new gas supplies boost domestic power generation, continued to rise, adding 3.7 percent on top of Monday's 10 percent gain.

Sidi Kerir Petrochemicals, which uses natural gas as feedstock, jumped 3.4 percent and carpet maker Oriental Weavers, whose main input is also sourced from hydrocarbons, climbed 3.0 percent.

Arab News