Estimated read time: 2-3 minutes
DUBAI, United Arab Emirates (AP) — Dubai's main stock market and Abu Dhabi's index closed on Tuesday at their lowest points of the year amid mounting anxiety over plunging oil prices.
Dubai's stock market lost 7.3 percent on the day, while Abu Dhabi's slid 6.9 percent. Also Tuesday, Saudi Arabia's stock market fell 7.3 percent.
Gulf equities have been falling since late November, while oil prices have shed nearly half their value since late June. Benchmark U.S. oil prices closed below $56 a barrel on Monday, their lowest level since May 2009, when the U.S. was still in recession. Brent crude prices fell below $60 a barrel, also their lowest since mid-2009.
Investors are concerned that the drop in the price of oil, which is the backbone of Gulf economies, could lead to less government spending and reduced economic growth.
Allen Sandeep, director of research at Naeem Holding, said people are concerned about budget deficits for the coming financial year.
"Countries like Saudi Arabia, the UAE and Qatar have good financial reserves — hard currency and gold — but I think the way the market is reacting to this is trying to assess what are the likely long-term effects of lower priced oil," Sandeep said.
Arabtec, Dubai's largest construction company, and Dubai Investments (DIC), a major investment company listed on the Dubai stock exchange, were down 9.8 percent by closing Tuesday. Emaar, the developer behind the world's tallest tower in the United Arab Emirates, lost 10 percent of its market value Tuesday.
Elsewhere in the Gulf, Qatar's index slid 3.5 percent.
Fadi Ajaj, trading manager at Al Sharhan Stock Center in Dubai, said although Gulf governments can weather lower oil prices due to revenue surpluses over the past years, the market is reflecting concerns about how long the price of oil will remain at current levels or dip even lower.
Egypt, one of the major indexes in the Middle East, fell 3.6 percent Tuesday. The benchmark EGX30 took a hit at the start of the trading week Sunday, but at closing Tuesday was still 25 percent higher than its lowest point of the year in January.