GCC Equity Markets Retreat in August as Oil Prices Weigh on Sentiment

Equity markets across the Gulf Cooperation Council (GCC) declined in August, reversing gains from the previous two months, as falling oil prices and sector-specific pressures weighed on investor sentiment, according to Kamco Invest’s latest GCC Markets Monthly Report.

The MSCI GCC index dropped 2.3% during the month, erasing July’s recovery and reducing year-to-date gains to just 1.4%. The downturn was led by Abu Dhabi, where the FTSE ADX Index fell 2.7%, followed by Saudi Arabia’s Tadawul (-2.0%) and Dubai’s DFM (-1.6%). Kuwait’s All-Share Index slipped 1.4%, while Qatar and Bahrain recorded marginal declines. Oman was the only market to post a gain, advancing 5.2% .

The correction came despite positive trends in global equities, with the MSCI ACWI up 2.4% in August on the back of gains in the US, Europe, and emerging markets. However, GCC investors reacted to a 6.1% monthly drop in oil prices, driven by oversupply concerns and slower demand recovery.

At the sector level, performance was mixed. The GCC Materials index gained 4.3%, supported by Saudi heavyweights such as SABIC (+6.0%) and Advanced Petrochemicals (+4.0%). Pharma & Biotech and Diversified Financials followed with increases of 3.9% and 2.7%, respectively. In contrast, Insurance led the losers with a 7.2% drop, while Healthcare and Real Estate fell 3.9% and 2.7%, respectively. Banking stocks were also weaker, down 2.4% .

Saudi Arabia’s Tadawul recorded its sharpest year-to-date decline in the region at -11.1%, reflecting weaker earnings announcements, oil price pressures, and geopolitical uncertainties. Conversely, Dubai remained the strongest performer in 2025 with a 17.5% gain, underpinned by strength in real estate and consumer sectors earlier in the year.

Trading volumes were also lower across several markets. In Saudi Arabia, share trading volumes fell nearly one-third month-on-month, while Abu Dhabi’s traded value dropped 25.6%. Dubai and Bahrain also reported slower activity, whereas Oman saw trading values rise by nearly 13% .

The report underscores ongoing divergence within GCC markets: while Oman and Dubai benefit from localized growth drivers, Saudi Arabia and Abu Dhabi remain sensitive to oil price fluctuations and global risk sentiment.