JEDDAH/TOKYO/NEW YORK: Gulf stock markets slumped Tuesday, dragged down by unrest in Bahrain and Libya as well as concerns about Japan's post-earthquake nuclear crisis. The declines reflected the continuing volatility in Mideast markets, where weeks of anti-regime protests that have swept through the Arab world are crafting daily a new political dynamic while unsettling investors. The latest cause for concern came after the six-member Gulf Cooperation Council deployed a Saudi-led force to prop up the monarchy in Bahrain. Saudi Arabia's benchmark Tadawul All Shares Index dropped 3.51 percent to close at 6,011.85 points Tuesday, while the Dubai Financial Markets index rebounded from steeper losses earlier in the day to close 1.9 percent lower. The losses affected companies in all sectors. Saudi Basic Industries Corp. (SABIC), which is active in Japan, dropped 4 percent, Samba Financial Group fell 5.1 percent and Kingdom Holding Company plunged 7.9 percent. "Intraday volatility is very high," said a Riyadh-based fund manager who asked not to be identified. "There is negativity on equity markets worldwide following Japan's devastation, while Saudi investors are also reacting to the regional political unrest," he added. "It's a combination of factors," said Shaheen Hosni, a Dubai-based sales manager with Mideast investment bank EFG-Hermes' brokerage arm. "We're mostly affected by regional issues, and Japan came over and above what's happening regionally." The losses in Saudi Arabia and Dubai, the two biggest Gulf markets, were echoed on a smaller scale elsewhere in the region. Kuwait's stock market's benchmark index closed down 1.2 percent to 6,324 points while Qatar's benchmark was off 1.6 percent. Oman, another Gulf neighbor embroiled in protests, fell almost 1.7 percent. In Dubai, developer Emaar Properties, the force behind the world's tallest building, was down almost 2.5 percent at AED2.74, while the Dubai Financial Market's own shares were off 5.56 percent to AED1.19. The political unrest has weighed heavily on the markets in the Gulf. "It's to be expected, given what's happening today in Bahrain," said John Sfakianakis, chief economist for the Riyadh, Saudi Arabia-based Banque Saudi-Fransi. "The shock waves are felt throughout the region." EFG-Hermes' Hosni said that the regional markets are already weak, leaving them vulnerable to sentiment based trading. "What's going to happen tomorrow most likely looks to be negative," he said. "But regardless of what happens in one single day, the markets are weak." Moreover, other major world markets also slumped. US stocks slumped 1 percent in a broad selloff Tuesday as fears Japan's nuclear power crisis could turn into a larger catastrophe drove investors to less risky assets. The Dow Jones industrial average was down 125.29 points, or 1.04 percent, at 11,867.87. The Standard & Poor's 500 Index was down 13.21 points, or 1.02 percent, at 1,283.18. The Nasdaq Composite Index was down 31.62 points, or 1.17 percent, at 2,669.35. In London, the London's FTSE 100 index of leading shares fell 1.38 percent to 5,695.28 points but was off early lows when it lost some three percent. In Paris, the CAC 40 dropped 2.51 percent to 3,780.85 points and in Frankfurt the DAX slumped 3.19 percent to 6,647.66 points. Other markets saw substantial losses too – Amsterdam fell 2.31 percent, Brussels shed 3.05 percent, Madrid was down 0.83 percent, having dropped more than three percent at one stage, Milan lost 2.01 percent and Swiss stocks were off 2.76 percent. Japan's Nikkei index fell as much as 14 percent before ending down 10.6 percent from a slide of 6.2 percent Monday.
