Gulf Markets Fall On Trade War Escalation Fears

2025-02-03 02:46:45

(MENAFN- Khaleej Times) Major stock markets in the Gulf fell in early trade on Monday in line with markets across the world after US President Donald Trump's tariffs on Canada, Mexico and China triggered fears of a broader trade war and a hit to global growth.

In the GCC, Saudi Arabia's benchmark index dropped 0.5 per cent, Dubai's main share index lost 0.7 per cent, with blue-chip developer Emaar Properties declining 1.1 per cent and top lender Emirates NBD retreating 1.2 per cent. In Abu Dhabi, the index was down 0.5 per cent. The Qatari benchmark fell 0.9 per cent.

The pan-European STOXX 600 index was down 1.3 per cent at 0845 GMT, set for its biggest one-day slide this year.

Futures for Wall Street's S&P 500 also fell 1.4 per cent, while those on the tech-heavy Nasdaq fell 1.6 per cent. Futures on the Russell 2000 index of small cap stocks - viewed as major beneficiaries of Trump's policies - fell 2.3 per cent.

Britain's FTSE 100 fell 1.5 per cent, while the pound dropped 0.7 per cent after Trump told reporters on Sunday that while the country was "out of line" when it came to trade, it may be able to avoid tariffs.

Indian shares dropped on Monday after Trump imposed sweeping tariffs on Canada, Mexico and China, spurring concerns of a broader trade war.

The Nifty was down 0.52 per cent at 23,361.05, while the BSE Sensex shed 0.41 per cent to 77,186.74. The Indian rupee weakened past 87 per dollar for the first time as several other regional currencies slumped.

"The Trump tariffs could severely disrupt global trade, slowing economic growth worldwide, which is spooking markets," said Anirudh Garg, partner and fund manager at Invasset Portfolio Management Services.

"Indian markets are at a critical crossroads; the capex-driven sectors are now taking a backseat as their growth momentum has subsided while consumption-linked segments are set to gain," Garg said.

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