Amman - Arab stock markets plummeted across the board on Tuesday as global recession fears and falling oil prices helped to fuel already dwindling confidence and panic selling, financial analysts said. The plunge was led by the Saudi and the United Arab Emirates stock exchanges where lack of cash and departure of foreign investors reportedly put enormous pressures on the psychology of investors, they added.
The Tadawul All Share Index (TASI) of the Saudi stock exchange tumbled 5.21 per cent led by the petrochemical conglomerate, the Saudi Basic Industries Corp. (SABIC), as well as the banking and construction sectors.
The UAE stock exchange of Dubai sank 7.29 per cent under selling pressures amid fears that big firms listed in the market could be facing financial crises and unable to meet their financial commitments, analysts said.
They attributed the sharp decline mainly to the contraction of credit facilities extended by banks, the retreat on world markets particularly the Wall Street and the failure of the Emaar real estate giant to re-buy its shares.
"The banks, which used to extend loans in the past to clients regardless of their solvency, are now pursuing a different policy of credit squeeze," Yasser Jundi, head of the Dubai-based al-Wataniyah brokerage said.
Kuwaiti shares extended losses on Tuesday with the KSE all-share index falling 2.16 per cent under heavy selling pressures and reports of shrinking liquidity.
"The excessive selling operations fail to attract buyers despite very low prices, thus bestowing ambiguity on the future of the market," Jassem al-Zerai, an analyst from NBK Capital said.
"The Kuwaiti stock exchange is in bad need of market makers which re-establish equilibrium between supply and demand," he added.
Jordanian shares also plummeted on Tuesday for the third day in a row with the all-share price index of the Amman Stock Exchange shedding 3.3 per cent.
The ASE decline was led by the Arab Potash Co., the Jordan Phosphates Mines Co. and the Jordan Petroleum Refinery.
