DUBAI, United Arab Emirates -- Stocks tumbled across the Middle East on Sunday as most regional markets opened for their first day of business following a historic downgrade of the United States' credit rating.
Mideast markets mostly operate Sunday to Thursday. That makes them the first to react to credit rating agency Standard & Poor's decision late Friday to cut the U.S. level one notch to AA+ from its top AAA rating. The only exception is OPEC powerhouse Saudi Arabia, which plunged 5.5 percent when it opened Saturday.
The Dubai Financial Market's benchmark index suffered some of the steepest declines, plunging more than 5 percent in early trading before trimming its losses. The index was down 3.8 percent to 1,482 points by early afternoon.
While the S&P downgrade weighed on the market, it was also dragged lower by a lower than expected quarterly profit from Arabtec Holding, the Emirati construction giant that helped build the world's tallest tower in Dubai. Arabtec shares fell 4.9 percent to trade at 1.4 dirhams (38 cents).
Egypt's benchmark EGX30 index fell over 4 percent by midday local time, bringing its year-to-date losses to more than 32 percent.
S&P's cut could shake investor confidence in the world's largest economy and send tremors coursing through global markets. Traders worldwide are eagerly watching to see how far larger and more liquid markets in Asia and Europe react to the downgrade when they begin opening Monday.
Financial ministers from the Group of Seven leading economies were preparing to hold a teleconference likely before Asian exchanges open to discuss efforts to stabilize world markets.
Other Gulf markets also opened sharply lower. The Abu Dhabi index slumped 2.5 percent, while Qatar's market shed 3 percent.
Farouk Miah, an analyst at NCB Capital in the Saudi capital Riyadh, said Mideast traders are concerned that debt problems in the U.S. and Europe could drag on oil-dependent economies in the region.
"A lot of people were expecting a downgrade. I think the bigger concern is the oil price falling" because of slumping demand in the West, he said.
Saudi Arabia's stock market was the only one in the region to open Saturday. The Tadawul's main index edged slightly higher Sunday, creeping up a tenth of a point following the previous day's rout.
Miah attributed the uptick to day traders looking to make a quick profit, not a sign of renewed confidence. He expects Mideast markets to slump further if other global markets tumble on the U.S. debt downgrade.
In Israel, the Tel Aviv Stock Exchange delayed the start of the week's first session after pre-market trade showed the benchmark index dropping more than 6 percent because of concerns over the U.S. debt rating cut.
Exchange spokeswoman Idit Yaaron said the start was pushed back by 45 minutes "so market players will have time to react logically and not under pressure." It tumbled 5.7 percent amid heavy trading to trade at 1089 points by late morning.