Qatar’s stock market index plunged over 6 per cent in morning trade today following the decision by the UAE, Saudi Arabia, Bahrain and Egypt to suspend diplomatic and transport links with the country.
Every stock listed on Doha’s headline index was trading sharply lower in early trade. QNB fell by 7.6 per cent, with Masraf Al Rayan and Industries Qatar down by over 9 per cent.
Shares in Dubai were down by 0.8 per cent at the start of trading, while shares in Abu Dhabi opened 0.5 per cent lower.
Oil prices rose in response to the shock decision to isolate Qatar, announced early this morning by state news agencies in the UAE and Saudi Arabia.
Brent crude futures jumped by as much as 1.6 per cent in early trade, hovering around US$50.50 a barrel mid-morning.
"The market is weak right now and this news isn’t going to help matters," said Sanyalak Manibhandu, the head of research at NBAD Securities.
The sharp fall in regional equities is a repeat of trends witnessed following the previous, albeit less severe, suspension of diplomatic ties between Qatar and some Arabian Gulf states in 2014.
"We’ve seen geopolitical pressures impact markets here before and this case is no different," said another analyst, who asked not to be named.
"What’s concerning this time is that the move was taken after the apparent failure of negotiations to diffuse tensions, as it seems as if we’ve hit a brick wall in terms of regional politics."
