The major Gulf exchanges are tracking Asian shares lower due to valuation fears

The Gulf's major stock markets fell on Wednesday morning, following the Asian share market lower after a tech-led selloff overnight on Wall Street brought the focus on stretched valuations.

The stock market is retreating after reaching record highs, amid fears that equity markets have become stretched. This comes as CEOs from Wall Street giants Morgan Stanley and Goldman Sachs asked whether such valuations could be sustained.

MSCI's broadest Asia-Pacific share index outside Japan has fallen as much as 2,3%, its highest since early April. It last traded at 1% lower.

Saudi Arabia's benchmark stock index fell 0.8%, and was headed for a fifth straight session of losses. The oil giant Saudi Aramco and the Saudi National Bank both saw their shares fall by 1.3%.

Saudi Electricity Co, a utility company, fell 4.6% after a drop in its quarterly net profit.

Saudi Arabia may be affected by the negative effects of Wall Street's high valuations.

Ahmad Assiri is a research strategist at Pepperstone. He said that despite Aramco’s solid earnings, and oil prices remaining in the low $60s, the recent global equity sell-off exposed latent sensitivity towards high valuation levels.

This recent drop, the steepest in the past few months, could translate to mild selling pressure for (Saudi stock) due the correlation between global equity market.

Investors weighed the outlook for supply and crude prices dropped amid a wider financial market slump.

ADNOC Drilling lost 0.5% in Abu Dhabi.

The drilling unit of Abu Dhabi’s state oil company has signed a deal for 80% of MB Petroleum Services, valued at $204 million.

Dubai's main stock index dropped 0.3% due to a drop of 1.1% in blue-chip developer Emaar Properties.

The Qatari Index fell 0.4% and the Qatar Islamic Bank dropped 1.1%. (Reporting and editing by Jan Harvey in Bengalur; Ateeq Sharif in Bengalur)

(source: Reuters)