Middle East stocks drop on Iran fears
Stocks across the Middle East tumbled yesterday as the easing of sanctions against Iran raised the prospect of a surge in oil supplies to a market already reeling from the lowest prices in more than a decade.
Markets across the region saw about €35bn wiped off their value on the back of the fears, with Saudi Arabia's Tadawul All Share Index dropping 5.4pc to its lowest level since March 2011.
Abu Dhabi's ADX General Index fell into a so-called bear market.
The Bloomberg GCC 200 Index, which tracks 200 of the six-nation Gulf Cooperation Council's biggest companies, traded at 9.5 times estimated 12-month earnings, the lowest in almost seven years. Iran's TEDPIX Index climbed 0.9pc, according to data on the bourse's website, extending Saturday's 2.1pc advance.
Iran, home to almost 10pc of the world's proven oil reserves, is preparing to boost exports after the United Nation's nuclear agency said the country has complied with the terms of an international agreement to curb its nuclear programme.
That threatens to put further pressure on prices, hurting the oil-dependent economies of the GCC. Iran's Deputy oil minister for commerce and international affairs Amir Hossein Zamaninia said the country is targeting an immediate increase in shipments of 500,000 barrels a day. It plans to add another half a million barrels within months.
Concern that Iran may exacerbate the global supply glut sent Brent crude, a benchmark grade for more than half the world's oil, to a new 12-year low on Friday, helping to spur a global stock rout.