- Bloomberg GCC 200 Index recovers as crude pares Monday's drop
- Dubai's gauge closes higher after slumping 2.5 percent
Gulf stocks reversed losses as oil pulled back from its biggest drop since February, following the failure of major crude producing countries to agree an output freeze over the weekend.
The Bloomberg GCC 200 Index, which tracks the biggest and most liquid shares in the six-nation Gulf Cooperation Council, added less than 0.1 percent at 3:12 p.m. in Riyadh, after dropping as much as 1 percent as Brent crude plunged 7 percent. A summit in Doha ended without a deal after Iran didn’t attend and Saudi Arabia said it wouldn’t agree caps without them. Oil pared its decline to 3.3 percent.
The moves underline the correlation between stocks in the GCC and the price of crude, which contributes the bulk of government revenue in the region and is a key driver of economic growth. Volatility -- close to a low for the year on the Bloomberg GCC 200 Index -- may now be poised to rise as Goldman Sachs Group Inc. and Barclays Plc predicted oil price swings until the second half of the year.
Markets are back to being “fully correlated to oil movements,” said Tariq Qaqish, the Dubai-based head of asset management at Al Mal Capital PSC. “Fears for oil prices in the long term will cause concern for investors. We need to see a quick drop and a rebound.”
Qatar’s QE Index rose 0.4 percent. Oman’s MSM 30 Index slid 1.3 percent, the most in more than two weeks. Saudi Arabia’s Tadawul All Share Index added 0.2 percent, moving closer to a bull market.
The DFM General Index, which earlier dropped as much as 2.5 percent, closed 0.1 percent higher. Abu Dhabi’s ADX General Index reversed losses to add less than 0.1 percent. Bahrain’s BB All Share Index gained 0.3 percent.