Qatar Stock Market tumbles after diplomatic ties cut by Gulf states

Qatar's stock market plunged on Monday after Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed ties with Doha, accusing it of supporting terrorism. 

Every stock listed on Doha’s headline index was trading sharply lower in early trade. QNB fell by 7.6 per cent, with Masraf Al Rayan and Industries Qatar down by over 9 per cent.

Oil prices rose in response to the shock decision to isolate Qatar, announced early this morning by state news agencies in the UAE and Saudi Arabia.

Brent crude futures jumped by as much as 1.6 per cent in early trade, hovering around US$50.50 a barrel mid-morning.

"The market is weak right now and this news isn’t going to help matters," said Sanyalak Manibhandu, the head of research at NBAD Securities.

The sharp fall in regional equities is a repeat of trends witnessed following the previous, albeit less severe, suspension of diplomatic ties between Qatar and some Arabian Gulf states in 2014.
“On the face of it, it could present a risk, but I don’t think there is too much in the Qatar situation,” said Daniel Hynes, an analyst in Sydney at Australia & New Zealand Banking Group Ltd. “Geopolitical risks haven’t really been that influential in recent times and I don’t think that will change too much.”

But the diplomatic rift could have a serious impact on some business deals and companies in the region, particularly Qatar Airways, which can no longer fly to some of the Middle East's biggest markets. 

In response, Qatar’s foreign ministry today said it regrets the ‘unjustified’ decision made by the Arab countries. “The measures are unjustified and are based on false and baseless claims,” the Qatari foreign ministry said, adding, “The aim is clear, and it is to impose guardianship on the state. This by itself is a violation of its (Qatar’s) sovereignty as a state.”