Stock markets in Saudi Arabia and the UAE plunged again on Sunday in response to a fresh slide of oil prices and the decision by credit rating agency Fitch to cut its outlook for Saudi Arabia.

Egypt's bourse also fell sharply.

The main Saudi stock index was down 5.2 per cent at 7,594 points after 20 minutes of trade, nearing major technical support at the December low of 7,226 points. This brought its losses so far this month to 16 per cent.

The main stock index in Dubai, the region's most volatile market, tumbled 6.6 per cent to 3,461 points, hitting a four-month low, at around 12.30 pm (local time). It has no major technical support left before the March low of 3,233 points. Abu Dhabi's index sank 3.88 per cent.

Selling was indiscriminate in Saudi Arabia, with petrochemical producer Saudi Basic Industries Corp (Sabic) losing 5.6 per cent, miner Ma'aden down 6.4 per cent and Alinma Bank sinking 4.8 per cent.

Fitch lowered its outlook for Saudi Arabia's foreign and local currency issuer default ratings to "negative" on Friday from "stable", citing cheaper oil, while affirming the ratings at 'AA'. Standard & Poor's cut Saudi Arabia's credit outlook to negative in February; the third major rating agency, Moody's, has not yet taken such action.

Egypt's stock index dropped 4.0 per cent as stocks were sold across the board. Although Egypt's economy should benefit from low oil prices, it receives aid and investment from the Gulf, while the turmoil in global equity markets has also hit investor confidence in Cairo.

Among major losers in Dubai Financial Market was Dubai's largest property firm, Emaar Properties, which fell 5.9 per cent and Abu Dhabi's biggest developer, Aldar Properties, which dropped 4.4 per cent.

With a relatively diversified economy and strong government finances, the UAE is better placed than most Gulf economies to ride out an era of cheap oil.

But investors are concerned that a further plunge in the Saudi stock market and slowing growth there could have an impact on asset prices around the region. - Reuters