DOHA (Dispatches) -- Most stock markets in the Persian Gulf ended lower on Sunday as trade war jitters resurfaced following Donald Trump’s additional tariffs on Chinese imports.
On Friday after markets closed, Trump announced a 100% tariff increase on Chinese exports to the U.S. and new export controls on all critical software, in response to China’s recent restrictions on rare earth mineral exports essential for tech and other industries.
Saudi Arabia’s benchmark index dropped 0.8%, hit by a 1.4% fall in Al Rajhi Bank and a 1.4% decrease in oil behemoth Saudi Aramco.
The kingdom’s crude oil exports to China are set to fall in November to about 40 million barrels as refiners are expected to switch to cheaper spot supply from other Middle East producers, Reuters reported on Friday, citing several sources with knowledge of the matter.
In Qatar, the index declined 0.9%, dragged down by a 1.8% slide in Qatar Islamic Bank.
Brent and U.S. crude futures fell more than $2 a barrel, or more than 3%, on Friday as U.S. Trump’s threat to impose increased tariffs on China cast a shadow over the demand outlook in a market seen as oversupplied.
Outside the Persian Gulf, Egypt’s blue-chip index concluded flat.
Meanwhile, S&P Global upgraded Egypt’s rating by a notch on Friday, citing ongoing reforms that have led to a sharp rebound in GDP growth, while Fitch highlighted the country’s fairly high growth potential and strong support from partners in its affirmation.
The wealthy Persian Gulf states are heavily reliant on oil and are economically sensitive to global developments and trade wars that alter oil prices, so the trade war between China and the United States has affected them.
Although most Persian Gulf states have tried to increase their economic ties with both China and the United States, due to their lack of domestic economic strength, they are increasingly vulnerable to global fluctuations.