Qatar’s stock exchange resumes its losses due to Arab boycott

Qatar’s stock exchange dropped Sunday as the tiny Gulf nation braced for a deadline to accept demands from four Arab countries in part over what they allege is its support for extremist groups.

Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut off ties with 2022 FIFA World Cup host Qatar in early June, restricting access to their airspace and ports and sealing Qatar’s only land border, which it shares with Saudi Arabia. They issued a 13-point list of demands to end the standoff June 22 and gave the natural gas-rich country 10 days to comply.

Qatar’s main QE stock index lost more than 3 percent when it reopened following a weeklong hiatus for the Eid al-Fitr holiday break – its first session since the demands were laid out. It eventually recovered some of its losses later in the trading session to close down 2.3 percent at 8,822.15.

The deadline is set to expire by day’s end, though the countries that issued the ultimatum did not provide a precise time or detail what immediate penalties, if any, Qatar will face.

Qatar has repeatedly denied charges it supports extremism and says the demands are an affront to its sovereignty.

Qatari supermarkets saw panic buying when the four countries initially cut ties. But the capital, Doha, was largely calm Sunday as residents waited to see how the crisis would play out.

Abdelaziz al-Yafaei, a Qatari out for an evening walk along the city’s bayside, said he was reassured that things would be fine, regardless of what happens over the course of the next days.

“We have a government, thank God, that is wise and knows how to provide for all of our needs, how to maintain security,” he said. “We have enough funds in the country, on the economic side. All of the affairs are headed for the better.”

Qatar’s foreign minister, Sheikh Mohammed bin Abdulrahman Al Thani, showed no signs of backing down in during a press briefing in Rome on Saturday, saying they were never meant to be accepted and that his country “is prepared to face whatever consequences.” Qatar’s government offered no additional comment Sunday.

While in Rome, Al Thani met with Italian Foreign Minister Angelino Alfano, who gave his backing to ongoing mediation efforts led by Kuwait. U.S. Secretary of State Rex Tillerson has also tried to resolve the dispute, with the U.S. last week urging Saudi Arabia and its allies to stay “open to negotiation” with Qatar.

Russian President Vladimir Putin has separately spoken with the leaders of Qatar and Bahrain, urging direct dialogue among all the states involved, according to statements released by the Kremlin on Saturday.