KUWAIT, March 29: The Kuwait Stock Exchange (KSE) ended 1.48 per cent down on Saturday at 2,754.7 points amid security fears, renewed by a missile attack against the capital.

The index of the Arab world’s second largest stock exchange opened the day at 2,790 points, compared to 2,796.1 points - its highest level in five years - on March 19, a day before the US-led invasion of Iraq started and the bourse board decided to remain closed.

Early on Saturday, an Iraqi missile evaded Kuwaiti defences and came down near a seafront shopping mall in Kuwait City, according to Kuwaiti officials.

It was the first time since the war broke out in Iraq more than a week ago that a missile had landed so close to Kuwait City. Most missiles have been intercepted by Patriot batteries but this rocket appeared to skim in below the radar.

The SKE index lost about 90 points during the three-hour session, but brokers said mutual funds and other big players helped it regain some of the losses before the closure.

Many traders surveyed by Reuters said the bourse should not have opened in such circumstances.

The market had bet on a quick end to the war. Kuwait has been subject to several Iraqi missile attacks since the start of hostilities on March 20.

It is clear now that the war will be extended, a financial analyst said, on condition of anonymity. The missile (on Saturday) means there is a possibility of penetrating defence barriers, he said.

Traders said the downtrend was expected to continue.

Today’s decline was sharp before a correction ahead of the close, said Gamal al-Bassri of Kuwait Financial Brokers Co. We expect a falling market.

The analyst said that in an instable environment everyone is a loser. Panic does not differentiate between a company and another. All would be negatively affected in a way or another.

He added the whole situation now was pinned on news on the military situation and whether the latest missile attack could happen again.

The gains up to March 19 were largely attributed to expectations that the war would end quickly and that Kuwaiti construction and service sector companies would win business from Iraqi reconstruction.

After nine days of battles, however, leaders of the allied forces are now talking about a longer-than-expected war.

The KSE, which has a total capitalization of about $30 billion, gained 39 per cent last year.—Reuters