Middle East stock markets closed lower on Monday, with Dubai’s index the biggest loser, on fears of a U.S. recession and growing concerns about widening tensions in the region.
The US unemployment rate jumped to a three-year high of 4.3% in July amid a sharp slowdown in hiring, raising concerns that the labour market is deteriorating and the economy is vulnerable to recession.
Dubai’s index plunged 4.5%, its biggest daily drop since May 2022, dragged down by a 7.6% drop in Emaar Properties.
All financial markets could be affected by concerns that the Federal Reserve may delay cutting interest rates, said Bas Kooiman, CEO and asset manager at DHF Capital.
“A recession in the US could have a wide-ranging economic impact and could affect the economies of the GCC countries,” he added.
In Abu Dhabi, the index closed down 3.4%, hurt by a 7.3% decline in the shares of First Abu Dhabi Bank, the UAE’s largest bank.
A survey published on Monday showed that the UAE’s non-oil private sector grew at its slowest pace in nearly three years in July, as growth in output and new orders slowed.
Meanwhile, the main Egyptian index closed down 2.33% at 27,840.6 points, as shares of Eastern Company for Tobacco fell 5.8%, Commercial International Bank 1.2%, El Sewedy 6.4%, Madinet Misr for Housing and Development 5.4%, Ezz Steel 2.8%, Talaat Moustafa Group 2.1%, and E-Finance for Financial Investments 0.8%.
The Saudi index closed down 2.1%, its lowest close since mid-December, weighed down by a 6.1% drop in Al-Taiseer Group and a 5.2% drop in National Commercial Bank, the kingdom’s largest bank, despite announcing an increase in quarterly profits.
The Qatari index closed stable.
Oil prices, a key driver of financial markets in the Gulf region, fell on concerns about global energy demand, overshadowing investor concerns about the potential impact on supplies from widening tensions in the Middle East.
Israel and the United States are preparing for a dangerous escalation in the region after Iran, the Palestinian Islamic Resistance Movement (Hamas) and Hezbollah vowed revenge on Tel Aviv for its assassination of the movement’s political bureau chief Ismail Haniyeh and Hezbollah’s military commander Fouad Shukr last week.
A White House official said on Sunday that the United States will deploy additional military capabilities to the Middle East as a defensive measure to calm tensions in the region.
