DUBAI – Gulf stocks opened in negative territory on Sunday reflecting general weakness across emerging markets mainly caused by a diplomatic and economic spat between the United States and Turkey.
The Turkish lira plunged last week after U.S. President Donald Trump doubled tariffs on Turkish steel and aluminium imports. On Friday, the lira fell 18 percent to a record low.
Other geopolitical factors, such as the reintroduction of sanctions on Tehran, as well as the diplomatic dispute between Saudi Arabia and Canada, contributed to the risk-off sentiment.
The Saudi index fell 0.8 percent in early trade, with losses spread across the petrochemical, banking and real estate sectors.
The worst performer in the first half hour of trading was Middle East Healthcare Co. which last week reported a fall in second-quarter profit to 34.3 million riyals from 62 million riyals one year earlier. The stock was down 8.3 percent.
In Dubai, where the index shed 0.4 percent, heavyweight Emaar Development was down 0.2 percent and the contractor Drake and Scull International (DSI) plunged 4 percent.
All eyes were on Dubai’s largest bank, Emirates NBD, which earlier this year has agreed to buy Turkey’s Denizbank from Russia’s state-owned Sberbank for $3.2 billion.
There was an overhang on the bank’s stock because of the Turkish deal, one analyst said, but share prices did not move early on Sunday.
The Turkish crisis weighed the most on the Qatar exchange. The index, down 1.5 percent, was pressured by the downward movement of some Qatari banks such as Commercial Bank and blue-chip Qatar National Bank, which dropped 2.3 percent and 2.7 percent, respectively.
QNB owns Finansbank in Turkey and Commercial Bank has a majority stake in Turkish lender Alternatifbank.(Reuters)