Persian Gulf shares retreated, sending Kuwait’s benchmark stock index to the lowest level in almost seven years, amid concern Europe will fail to contain its debt crisis, trimming investor appetite for riskier assets.
Combined Group Contracting Co. (CGC), the Kuwaiti construction company, lost 1.2 percent and lender Al-Ahli Bank of Kuwait (ABK) fell for a second day this week. The Kuwait Stock Exchange Unweighted Index dropped 0.9 percent to 5,850.60, the lowest close since Aug. 25, 2004. The measure slumped 3.6 percent this week. The Bloomberg GCC 200 Index (BGCC200) of the region’s stocks slipped 0.2 percent. Dubai’s DFM General Index (DFMGI) rose 0.2 percent after losing as much as 1.4 percent earlier.
“Our markets are obviously following the volatility of global markets,” Ahmed Talhaoui, the Abu Dhabi-based head of investment at Royal Capital PJSC, said. “Local markets are entirely at the mercy of the global risk aversion.”
U.S. stocks tumbled yesterday, sending the Dow Jones Industrial Average to the lowest since September. The Dow Jones Index fell 4.6 percent. The STOXX Europe 600 Price Index swung between gains of as much as 2.7 percent and losses of up to 0.6 percent as concern over Europe debt crisis was tempered by higher profits from the U.S. to Japan and Australia.
“In addition to the global backdrop institutional investors in particular see few domestic drivers,” said Julian Bruce, equity sales head at EFG-Hermes Holding SAE in Dubai. “Recent earnings releases have been fairly moribund.”
Commercial Bank of Kuwait SAK (CBK) on Aug. 3 said second-quarter profit declined to 198,000 dinars ($726,000) from 2.3 million dinars a year earlier. The stock retreated 2.3 percent to 850 fils when it last traded Aug. 9.
Combined Group Contracting fell the most since Aug. 9 to 1,660 fils. Ahli Bank decreased 1.5 percent, the most since Aug. 7, to 650 fils.
Saudi Arabia’s market is closed for the weekend.
To contact the reporter on this story: Zahra Hankir in Dubai at email@example.com
To contact the editors responsible for this story: Claudia Maedler at firstname.lastname@example.org