Arab stock markets faced significant losses on Monday, impacted by global market downturns, rising fears of a US economic recession, and escalating geopolitical tensions in the region.
The Dubai Financial Market Index closed down by 4.52% at 4045.9 points, marking a difficult start to the trading week in the UAE.
The Abu Dhabi Securities Exchange also fell, closing 3.42% lower at 8974.6 points.
Talal Touqan, Chief Investment Officer at BHM Capital, attributed the sell-off in UAE markets to pressures from global markets and regional markets on Sunday. With the opening of the UAE markets on Monday, foreign trading activities and reactions tend to be direct and strong.
He noted that trading volumes in the UAE markets are relatively low, amplifying the impact of foreign investments.
The Qatar Stock Exchange remained stable by the end of the session, although it had dropped 1.2% during trading to 9937 points.
Kuwait’s premier market index fell 1.97% to 7543 points. Bahrain’s index decreased by 1.03%, while Muscat’s index fell by 0.97% to 4602 points.
In Saudi Arabia, the Tadawul All Share Index (TASI) managed to reduce its losses to 2.1%, closing at 11502 points, driven by declines in major stocks like Aramco.
Egypt’s main index, EGX 30, dropped by 2.33% to 27840 points.
Raed Diab, Vice President of Research and Investment Strategies at Kamco Invest, explained that the regional markets were affected by global market disruptions amid fears of a US recession.
The markets are also feeling the impact of geopolitical tensions and speculations about Iran’s reaction, leading investors to exit and await further developments.
In Asia, Tokyo’s stock markets experienced severe declines on Monday. The Nikkei index plummeted 12.4% to 31458 points, and the broader Topix index dropped 12.2% to 2227 points. Trading was halted twice due to the losses exceeding 10%.
These were the worst losses for the Nikkei in 37 years, triggered by massive sell-offs over concerns that the US economy might be in worse shape than anticipated.
Last week’s dismal US job numbers and rising unemployment rates stoked fears of a recession, leading to a global market sell-off on Friday, which continued into Asian markets on Monday.
All Gulf and Egyptian stock markets closed down on Sunday amid additional pressure from regional tensions following the assassination of Hamas political bureau chief Ismail Haniyeh in Tehran and a senior Hezbollah military commander in Beirut by Israeli forces. Iran and its allies have vowed to retaliate.
