Gulf markets plunge on US-Iran tensions; Aramco at lowest since IPO
Kuwaiti and Saudi shares led Gulf stocks sharply lower in late afternoon trade on Sunday in the wake of a US drone strike in Baghdad that killed Iran's top military commander.
Iranian military commander Qassem Soleimani, the architect of Tehran's overseas military operations was killed on Friday in a US drone strike on his convoy at Baghdad airport.
"A US-Iran war could shave 0.5 percentage points or more off global GDP, mainly due to a collapse in Iran’s economy, but also due to the impact from a surge in oil prices," Jason Tuvey, senior emerging markets economist at Capital Economics, said in a note last week, according to Reuters.
Oil prices jumped on Friday, while investors dumped equities and piled into haven assets like gold and Treasurys in a knee-jerk reaction to the US strike. Tehran vowed to retaliate - and most observers expect them to follow through, MarketWatch said.
Oil prices jumped to $63.05 a barrel on Friday, their highest level in more than three months, after Soleimani's killing sparked fears that conflict in the region may disrupt global oil supplies. On Sunday, Brent crude futures rose $1.05 to $69.65 a barrel, while U.S. crude climbed 94 cents to $63.99, Reuters said.
Shares of oil giant Saudi Aramco fell 1.7 percent to their lowest level since listing last month in a record initial public offering (IPO).
Aramco shares dropped to 34.55 riyals ($9.21) a share, the lowest level since it started trading last month.
The Kuwaiti index, the best performer in the region in 2019, was down almost 4.1 percent, while Saudi stocks plunged 2.2 percent.
Dubai stocks were down 3.1 percent with property firm Emaar Properties falling 3.7 percent. The Abu Dhabi index fell 1.41 percent.
Banks also took a beating, with Al Rajhi Bank down 2 percent and Samba Financial Group down nearly 3 percent.