Stocks tumbled across the Middle East today as most regional markets reopened following the historic downgrade of the United States' credit rating. The region's markets mostly operate Sunday to Thursday, meaning they were the first to react to Standard & Poor's decision late Friday to cut the US level to AA+ from its top AAA rating. "Clearly there's a negative sentiment prevailing on the global financial markets. We're seeing a strong contagion effect on our markets," says a Dubai-based expert.
A look around the region:
- Saudi Arabia's market was first to react when it opened yesterday, and plunged 5.5%. It failed to mount a meaningful recovery today.
- The Dubai Financial Market's benchmark index suffered some of the region's steepest declines, tumbling more than 5% in early trading, and closing down 3.7%.
- The Abu Dhabi and Qatar market indexes each slumped 2.5%.
- Egypt's benchmark EGX30 index fell more than 4%.
- In Israel, the Tel Aviv Stock Exchange delayed the start of the week's first session by 45 minutes after pre-market trade showed the benchmark index dropping more than 6%. It was down 6.2% amid heavy trading by the afternoon.
Traders worldwide are eagerly watching to see how far larger and more liquid markets in Asia and Europe react to the downgrade when they open tomorrow. (Read more Tel Aviv