Virus variant sends Middle East stocks into nosedive after oil slumps

Middle East stocks are taking their cue from last week’s global sell-off as the emergence of a worrying new coronavirus variant reverberates through markets, sending every big index into retreat.

Dubai’s benchmark gauge dropped the most, tumbling 4.6% at 12:54pm local time, its sharpest loss since March 2020. Saudi Arabia’s main index fell 3.2%, the most since October 2020. There were declines in Israel, Egypt, Jordan, Kuwait, Qatar and Abu Dhabi. Oman’s main gauge was the only one to advance.

Coming in the wake of Friday’s worldwide slump, the declines across the energy-rich markets of the Gulf threaten to undo some of the gains made in 2021 amid a flurry of initial public offerings and a rally in oil prices. Brent, the benchmark grade for more than half the world’s oil, lost almost 12% on Friday on concern the new Omicron Covid-19 variant will crimp air travel and usher in fresh lockdowns.

As governments around the world announced measures to limit the variant’s spread, Israel on Saturday banned foreigners from entering the country for two weeks, while Saudi Arabia and the United Arab Emirates suspended flights to and from SA — where Omicron was identified — as well as other African nations.

“We are going to mimic the sell-off we have seen in the global markets today. I don’t think it’s a surprise,” Ahmed Badr, head of the Middle East and North Africa at Credit Suisse in Dubai, said in an interview with Bloomberg TV.  “The question is how long” it will last and “what kind of opportunities it’s going to present in terms of buying opportunities,” he said.

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