JEDDAH: Gulf markets stumbled on Thursday as investors cut their exposure while they await signs that oil prices have found a floor and for state budget announcements.
Saudi Arabia’s Tadawul All-Share Index (TASI) slid 0.7 percent to 6,949 points, falling within 115 points of November’s 35-month low.
Trading volumes hit a week-high, but remain well below the three-month average ahead of Saudi Arabia’s annual budget announcement later this month.
“Investors are holding off entering the market,” said a Riyadh-based portfolio manager. “The budget announcement will be the decisive factor (for deciding) trade positions.”
The budget’s monetary value will indicate the extent to which slumping oil prices have weakened the government’s finances, the trader said.
The budgetary allocations to each sector will also shape economic activity in those industries and so are also of great interest to investors, he added.
Crude prices fell below $40 at 1325 GMT. Global oversupply has gripped oil markets despite lower US crude inventories this week.
The sustained slump in oil prices has hurt state finances in the Gulf and soured sentiment among both regional and foreign traders, with government spending a major factor in determining private sector profitability.
Dubai’s index dropped 1.9 percent, dragging the bourse down to its lowest close in over two years.
Drake and Scull plunged 3 percent to 0.38 dirhams, tumbling to a record low since going public in 2009.
