A further slide in oil prices may weigh on Gulf stock markets on Monday with Saudi Arabia’s index possibly underperforming its peers because of that market’s large petrochemical sector.
In Asian trade, Brent crude futures are down 0.7 percent at $51.02 a barrel, a fresh three-month low.
On Sunday, the Saudi stock index lost 1.2 percent to 6,834 points, heading for a test of technical support at the January low of 6,745 points.
Another concern for the markets is an increasing outlook for US monetary tightening. Global equity prices already reflect the expected US interest rate hike this week, but interest rate futures are now pricing in about a 50 percent chance of another hike in June.
This may aid regional banks, particularly Saudi ones, that could benefit from higher net interest margins, but it may slow the Gulf’s already tepid economic recovery and deter tourist flows to and real estate investment in Dubai.
Among Saudi insurance shares, which have been active since Sanad Cooperative Insurance said at the end of last week that it was planning voluntary liquidation, Amana Cooperative Insurance Co may attract interest after it said its accumulated losses had been reduced below 50 percent of its capital.