OREANDA-NEWS. February 11, 2015. Gulf stocks fell on Tuesday after Standard & Poor's cut credit ratings and outlooks for the region's major oil-producing nations including Saudi Arabia and Bahrain, citing pressure from weaker energy prices.

The Saudi benchmark index was 0.4 percent lower. Dubai dropped 0.7 percent while Abu Dhabi was also marginally weaker. Omani stocks tumbled 0.9 percent, led by a 2 percent fall in its leading lender Bank Muscat

Late on Monday, S&P slashed its forecasts for average oil prices to \\$55 per barrel for 2015, compared with an earlier estimate of \\$105, and lowered its rating on Bahrain and Oman and cut its outlook on Saudi Arabia.

"There could be a downward spiral of ratings in some countries in the Gulf, especially in some of the weaker countries such as Oman that have less of a cushion," said Andre Andrijanovs, credit strategist at Exotix.

S&P also cut its rating on Kazakhstan, leaving the country's 2024 \\$1 billion sovereign bond two cents lower at 88.52 cents in the dollar, according to Tradeweb.

Five-year credit default swaps rose 10 basis points to 308 bps, a two-week high, according to financial data provider Markit.

"With the oil price where it is, it's obvious that ratings will be under pressure. Their economy is so reliant on oil and lacks diversification, plus other (export) commodities such as copper and coal are also under pressure so it was just a matter of time before they got downgraded," Andrijanovs said.

Kazakhstan's tenge currency was flat at 185 per dollar but devaluation pressure has been building and forwards price the currency at 217 in three months time.

The currency of another oil exporter Nigeria fell 1.3 percent versus the dollar to new record lows amid concerns over political stability after the country said on Saturday it would delay its presidential election by six weeks to March 28, citing security concerns.

However, Russian stocks were higher with Moscow's RTS index up 1 percent while the rouble was about 0.4 percent stronger against the dollar as hopes for a political solution to the Ukraine crisis outweighed a weak oil market.

The leaders of Russia, Ukraine, Germany and France have agreed to meet in Belarus on Wednesday to try to broker a peace deal for Ukraine, days after talks in Moscow involving the French, German and Russian leaders.

Hungary's forint fell 0.7 percent against the euro, leading regional losses and hit by jitters over Greece. Societe Generale advised clients to sell the forint, adding: "The forint is the most vulnerable (central European) currency in this risk-off environment"

Romania's leu was flat, appearing to shrug off the government's failure to reach an agreement with the International Monetary Fund, the European Commission and the World Bank on a 4 billion euro aid deal.

MSCI's emerging equity index was flat though Chinese shares earlier ended 1.5 percent higher as data showing falling inflation fanned rate cut expectations.