Major Gulf markets ease on weak oil prices, global growth concerns

Major stock markets in the Gulf fell in early trade on Wednesday amid weak oil prices and as worries about the global growth outlook drove investors away from risky assets.

US manufacturing contracted at a moderate pace in August amid some improvement in employment, but a further decline in new orders and rise in inventory suggested factory activity could remain subdued for a while.

A slew of US economic data is due this week, including figures on job openings, jobless claims and the closely-watched non-farm payrolls report which is due on Friday.

Given the Federal Reserve's focus on the labour market, the payrolls report could decide whether the US central bank will likely cut rates by 25 basis points or a super-sized 50 bps.

Monetary policy in the six-member Gulf Cooperation Council, including Saudi Arabia, is usually guided by the Fed's decisions, as most regional currencies are pegged to the US dollar.

Saudi Arabia's benchmark index dropped 0.6 per cent, weighed down by a 1.3 per cent fall in aluminium products manufacturer Al Taiseer Group.

Among other losers, oil giant Saudi Aramco was down 0.7 per cent.

Oil prices - a catalyst for the Gulf's financial markets - fell, extending a plunge of more than 4 per cent the previous day and hovering at their lowest since December, on expectations that a political dispute halting Libyan exports could be resolved and concerns over sluggish global demand.

Concerns over the sluggish outlook in China - the world's biggest oil importer - and the possibility of a global slowdown that would mean reduced fuel demand have exacerbated the decline in oil prices.

Dubai's main share index lost 0.3 per cent, hit by a 1.1 per cent drop in blue-chip developer Emaar Properties.

In Abu Dhabi, the index declined 0.5 per cent.

The Qarari benchmark retreated 0.5 per cent, with Qatar Islamic Bank losing 1 per cent.