Middle Eastern markets mixed amid growing recession fears

A trader looks near electronic charts showing stock market data at the Bahrain Stock Exchange after Joe Biden won the U.S. presidency, in Manama, Bahrain November 8, 2020. REUTERS/Hamad I Mohammed

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July 5 (Reuters) – The Saudi stock market extended its losses for a third session on Tuesday amid mixed responses from Middle Eastern stock markets to growing investor concerns about a possible global recession.

Saudi Arabia’s benchmark (.TASI) fell 0.1%, hit by a 4.6% drop in Sahara International Petrochemical (2310.SE).

The kingdom and the United Arab Emirates are increasing state spending on social protection by billions of dollars as they seek to protect their citizens from the rising cost of living. Read more

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The United Arab Emirates is doubling its financial support for low-income Emirati families to 28 billion dirhams ($7.6 billion) to help tackle soaring inflation in the Gulf state, while the Saudi Arabia is planning an allocation of 20 billion riyals ($5.33 billion).

The main stock market index (.DFMGI) in Dubai, the Middle East’s travel and tourism hub, fell 1.1%, hitting its lowest level since late December and wiping out gains so far this year .

Prime developer Emaar Properties (EMAR.DU) fell 2.8%, while utility company Dubai Electricity and Water (DEWAA.DU) ended down 1.6%. Elsewhere, shares of Tecom Group, which is owned by the Dubai leader’s investment vehicle, fell 8.6% on their stock market debut.

Business activity in the UAE’s non-oil private sector shrank at its slowest pace in five months in June, although growth remained positive for a 19th consecutive month, according to a survey released on Tuesday. Read more

In Abu Dhabi, the index (.FTFADGI) lost 0.4%, with the country’s largest lender, First Abu Dhabi Bank (FAB.AD), losing 1%.

Oil prices, a key catalyst for Gulf financial markets, fell as fears of a possible global recession reducing fuel demand outweigh fears of supply disruptions, highlighted by a production reduction expected in Norway.

The benchmark Qatari index (.QSI), however, gained 0.4%, helped by a 3.5% rise in the Qatar Islamic Bank (QISB.QA).

Outside the Gulf, Egypt’s blue chip index (.EGX30) fell 0.3% to its lowest in over 2 years, with Fawry For Banking Technology and Electronic Payment (FWRY.CA) down 0.3%. 7.8%.

However, losses were limited by an 8% jump in Madinet Nasr For Housing and Development (MNHD.CA).

Egyptian property developer SODIC (OCDI.CA) said on Tuesday it had submitted an offer to buy up to 100% of Madinet Nasr.

($1 = 3.6727 UAE Dirham)

($1 = 3.7539 riyals)

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Reporting by Ateeq Shariff in Bangalore; Editing by Alexander Smith

Our standards: The Thomson Reuters Trust Principles.

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