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Gulf markets tumble as oil slides below $60

Stock markets in the Gulf fell sharply on Tuesday after oil resumed its slide on bearish comments about OPEC and weak Chinese manufacturing data.

Dubai's index closed 7.3 percent lower at 3,084 points, a one-year low. Abu Dhabi's benchmark ended 6.9 percent lower, posting its biggest daily loss in five years and hitting a one-year low of 3,892 points.

"We are in the panic mode now, there is no more support and investors are not rational any more," said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi.

Brent crude prices fell below $60 a barrel on Tuesday for the first time since July 2009 as Chinese factory activity slowed and stumbling emerging market currencies dented demand expectations.

United Arab Emirates Oil Minister Suhail Bin Mohammed al-Mazroui said late on Monday that there was no need for an emergency OPEC meeting to try to support oil prices.

Qatar's bourse closed 3.5 percent down, Kuwait lost 2.1 percent and Oman was down 2.9 percent.

Saudi Arabia's index, down 7.5 percent in mid-session trade, was headed for its worst day in six years.

Although Dubai exports only a small amount of oil, investors fear reduced export revenues in the Gulf could prompt governments to slash spending and slow the regional economy, for which Dubai serves as a financial and commercial centre.

Speaking at a conference in Dubai on Tuesday, an International Monetary Fund official said that although the oil price plunge would cut revenues of Gulf Arab governments, they had big reserves so in general they would not need to cut state spending significantly.

A senior Dubai official said the emirate's economy was coping well with a difficult global environment and was expected to grow about 4.5 percent this year. An Abu Dhabi official said oil's slide would not affect economic development projects.

The retail investors who dominate equity trading in the Gulf are ignoring such statements, however, and instead scrambling to sell to avoid further losses. Some have leveraged positions which they are being forced to exit.


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