Most Gulf stock markets closed lower on Wednesday, in line with global shares after an overnight tech-led sell-off on Wall Street put the spotlight on stretched valuations.
Stocks are retreating from record highs on fears equity markets may have become overstretched after the CEOs of Wall Street heavyweights Morgan Stanley (MS.N) and Goldman Sachs (GS.N) questioned whether sky-high valuations can be sustained.
Saudi Arabia’s benchmark index (.TASI) declined 1.2%, falling for a fifth consecutive session, hit by a 0.6% fall in Al Rajhi Bank (1120.SE) and a 2% tumble in Alinma Bank (1150.SE), as the lender traded ex-dividend.
Elsewhere, utility firm Saudi Electricity Co (5110.SE) plunged 8% — its biggest intraday fall since March 2022 — following a decline in quarterly net profit.
“The headwinds from Wall Street’s elevated valuations may spill over into the Saudi market. Despite Aramco’s solid earnings and oil prices holding around the mid-$60s per barrel, the latest global equity sell-off has exposed a latent sensitivity to high valuation levels that have gone untested for some time,” said Ahmad Assiri, research strategist at Pepperstone.
He added that “this recent downswing, the steepest since early October, could translate into mild selling pressure on Saudi stocks due to the overall correlation between global equity markets.”
However, Savola Group (2050.SE) advanced 3.7% after the kingdom’s largest food products company posted a 113% rise in third-quarter profit.
Perfect Presentation for Commercial Services (2P) (7204.SE) jumped 6.2% to become the top gainer on the index after its shareholders approved a 10% capital hike, increasing the firm’s capital to 330 million riyals ($87.99 million).
In Abu Dhabi, the index (.FTFADGI) dropped 0.4%, with ADNOC Drilling (ADNOCDRILL.AD) losing 1.3% as the firm traded ex-dividend. Meanwhile, ADNOC Drilling signed a definitive deal to acquire an 80% stake in MB Petroleum Services for an enterprise value of $204 million.
A ceasefire has brought relative calm to Gaza, but aid agencies warned Tuesday that assistance is still not arriving fast enough, with winter approaching.
In Dubai, the main share index (.DFMGI) fell 0.3%.
Outside the Gulf, Egypt’s blue-chip index (.EGX30) edged 0.2% higher, hitting an all-time high led by a 5.7% leap in Talaat Moustafa Group (TMGH.CA), rising for a fourth consecutive session.
On Monday, the company’s unit launched the development of a new integrated tourism project with an anticipated investment of $788 million.
“The Egyptian market remains on a solid and healthy trajectory, backed by favorable corporate and macroeconomic developments and a generally better outlook,” said Milad Azar, market analyst at XTB MENA.
Market Summary:
| Market | Index Code | Change | Level |
| Saudi Arabia | (.TASI) | -1.2% | 11,257 |
| Abu Dhabi | (.FTFADGI) | -0.4% | 10,015 |
| Dubai | (.DFMGI) | -0.3% | 5,992 |
| Qatar | (.QSI) | -0.2% | 11,007 |
| Egypt | (.EGX30) | +0.2% | 39,132 |
| Bahrain | (.BAX) | +0.1% | 2,080 |
| Oman | (.MSX30) | -0.9% | 5,566 |
| Kuwait | (.BKP) | -0.5% | 9,462 |
($1 = 3.7504 riyals)
