World Economy

UAE Stocks Sink on Oil Slide

UAE Stocks Sink on Oil SlideUAE Stocks Sink on Oil Slide

United Arab Emirates stock markets slid in early trade on Sunday in response to further weakness in oil prices and the decision by Fitch Ratings to cut its outlook for Saudi Arabia’s debt because of cheap oil.

The main stock index in Dubai, the region’s most volatile market, tumbled 4% to 3,563 points, hitting a four-month low. It has no major technical support left before the March low of 3,233 points. Abu Dhabi’s index sank 1.4%, Reuters reported.

Among major losers, Dubai’s largest property firm, Emaar Properties, fell 5.9% and Abu Dhabi’s biggest developer, Aldar Properties, dropped 4.4%.

US oil traded below $40 a barrel on Friday for the first time since the 2009 financial crisis, while Fitch lowered its outlook for Saudi Arabia to “negative” from “stable”.

With a relatively diversified economy and strong government finances, the UAE is better placed than most Persian Gulf Arab economies to ride out an era of cheap oil.

But investors are concerned that a further plunge in the Saudi stock market and slowing growth there could have an impact on asset prices around the region.