Frank Kane

• Stocks pulled back from the steep fall, but oil suffered another day of decline

DUBAI: Most global and regional financial markets saw a modest rebound as stocks pulled back from the steep falls of Monday, but oil suffered another day of decline.

Financial experts warned that sentiment was fragile and uncertain across financial markets in light of the ongoing coronavirus crisis and its effects on the global economy, despite an $850 billion stimulus proposed by US authorities.

Wall Street opened with a modest increase, with the main index — the S&P 500 — a couple of percentage points better off, after the big European bourses had experienced volatility throughout the day.

In the Middle East, the big markets — which often track each other’s movements — went in different directions.

Saudi Arabia’s Tadawul closed 2.47 percent ahead, while the indices in the UAE were significantly in the red. Abu Dhabi was more than 6 percent lower and Dubai nearly 5 percent.

Analysts said the Saudi improvement was largely due to a better performance from its biggest stock, Saudi Aramco, which rose 4.68 percent to SR29.10 ($7.75) per share.

Aramco’s improvement came after a webcast conference between executives and investment analysts on Monday, and was achieved despite another worrying day in oil markets.

Brent crude, the Middle East benchmark, was trading below the psychologically significant $30-per-barrel mark most of the day, edging ever closer to the US West Texas International standard.

On both stock and oil, however, investment experts warned that financial markets were still on the brink as the economic effects of coronavirus continued to spread.

Investors were especially nervous by Chinese economic data showing much bigger falls in industrial output in the first two months of the year.

Tarek Fadlallah, chief executive of Nomura Asset Management’s Middle East business in Dubai, told Arab News: “Pricing financial assets during a period of unprecedented economic uncertainty is virtually impossible. There’s no way to know what will end up being cheap, or what may still be expensive.”  

Nouriel Roubini, the economist credited with having predicted the 2009 financial crisis, said “the mainstream convention wisdom is now that we will have two quarters of rolling recession,” spreading from Asia across the Middle East to Western markets. He pointed to worrying trends in global credit markets.

Oil sentiment was just as pessimistic as producers ramp up supply even as demand falls significantly.

Analysts at Goldman Sachs changed their forecast for Brent by mid-year to $20 per barrel, down from $30, because of “large commitments from core-OPEC for April/May deliveries.”