Qatari stocks tumbled 8.27% yesterday amid worries the country could be exposed to the Dubai debt crisis.

On the first day of trading after the Dubai debt crisis, Qatari shares lost 595 points to close at 6,598.17. The news about Dubai debt crisis came out last week when the Qatar Exchange was closed.

All four sectors in the Qatari index, led by banks, dropped sharply with many listed firms falling close to the maximum allotted 10%. Market heavyweight Industries Qatar lost 9.31% to QR109.10, while QNB shed 9.1% to QR147.

At the opening, the benchmark index raced down sharply, shedding more than 650 points amid a panic sell-off, losing all its 2009 gains. The index, however, regained some lost ground and closed at 6,598.17 points, below the 7,000-point mark and under 2008 close of 6,886.12 points.

Qtel lost 9.41% to close at QR138.30. The closing price of some other stocks were: National Cement – QR77.90 (down 9.95%), Doha Bank – QR43.70 (down 9.39%), Commercialbank – QR60.60 (down 9.96%), Doha Insurance – QR21.40 (down 9.91%), Industrial Manufacturing – QR37.90 (down 9.33%) and Ezdan – QR59.90 (down 9.71%).

The strong reaction by Qatari stocks is obviously linked to the “believed exposure” of local companies to the UAE economy in general and that of Dubai in particular.

Financial analyst Abdullah al-Khater, however, downplayed the impact of the Dubai crisis on Qatar. “I believe the impact on Qatar is very minimal. Today’s drop is more related to the psychological impact,” he said.

The performance of Gulf stocks (other than in the UAE) remains to be seen in the next two remaining trading sessions this week given the closure of the emirates’ bourses in view of the UAE national day. Dubai Financial Market said it would remain closed today and tomorrow on account of the national day. Trading resumes on December 6.

Related posts:

1. European stocks rise as Dubai concerns ease