Gulf stocks down sharply after OPEC stands pat

Alexander Bueso Sharecast | 30 Nov, 2014 18:41 - Updated: 19:02 | | |

oil, tullow, afren

Stock markets in the Persian Gulf region ended trading on Sunday with sharp losses, as the shift in oil rents from producing nations to consumer countries further cristalised; after the price of oil reeled in reaction to OPEC's decision on Thursday to stand pat.

Hardest hit was Saudi Arabia's main stock exchange index, which dropped 4.99% to end the day at 8,625 points, near a one-year low.

Front month West Texas crude futures slid $7.35 to end the day at $66.15 on NYMEX, down by over 10%.

Developed countries, in particular, are expected to benefit, while the outlook for emerging economies is rather harder to read, as a strengthening US dollar - resulting from less recycling of 'petrodollars' into other currencies - may lead to thinner capital inflows.

In particular, there is interest in how Indian markets - given that is a large oil importer - behave.

US equities, in any case, are seen by some observers as standing to gain the most, as opposed to those from emerging market countries - if past patterns repeat themselves.

Abu Dhabi's benchmark fell 2.6% to 4,675 points and Qatar's by another 4.3%. Kuwait's index fell 3.4%, to 6,753 points, and Oman's bourse dropped 6.2%.

On Friday, Russia's rouble got whacked 3.6% lower to 50.4085 against the US currency unit, a new all-time low. The country stands to lose as much as $140bn a year as a consequence of the decline in oil prices, Finance Minister Anton Siluanov said last week.

Other oil and commodity exporting countries' currencies also fell back. Brazil's real surrendered 1.4% to trade at 2.5654 versus the 'greenback' by the end of trading. Canada's Loonie ceded 0.5% to 85.06 US cents. Norway's krone was at five-year lows.

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