Dubai:  The Dubai Financial Market (DFM) index fell more than one per cent on Tuesday as global markets took a bearish turn amid rising tensions between North Korea and South Korea and over concerns Ireland's debt problems could spill over to other countries in the Eurozone.

"The market today fell due to geopolitical tensions in the Korean peninsula, Ireland issues and concerns over the Saudi king's health," said a market analyst.

Analysts say the Dubai market needs a local catalyst to move higher. They say market participants are trying to ascertain how monetary policy tightening in China, the rescue package for Ireland and the low inflation dynamic in the US supporting the Fed's second phase of quantitative easing (QE2) will impact GCC equities. Analysts are expecting the market to be range-bound in the near term.

The DFM index fell 1.16 per cent to 1,691.48. About 96.98 million shares worth about Dh155.43 million were traded.

The decline was mainly due to the fall of DP World, Emaar, Arabtec, Air Arabia, Hits Telecom and du. About 13.19 million shares of Emaar, worth about Dh48.67 million were traded, closing 1.86 per cent lower at Dh3.69.

Of the 25 companies traded, only 3 rose, 21 fell and 1 was unchanged. The top gainer was AlSalamsudan, closing 4 per cent higher at Dh1.82. Hits telecom was the main loser, falling 4.13 per cent to close at Dh1.16.

Abu Dhabi

In Abu Dhabu, the Abu Dhabi Securities Exchange (ADX) general index rose 0.07 per cent due to gains by insurance and telecommunication stocks.

The ADX general index closed at 2,755.81 with the volume of transactions higher than on Monday, even though the global markets turned bearish on the possibility of a contagion in the Eurozone arising from Ireland's debt issues and due to a reported skirmish on the Korean peninsula.

"The Abu Dhabi market today was affected by global sentiments with the banking sector proving to be more resilient than the real estate sector," said a market analyst.

According to analysts, the Abu Dhabi market is expected to be range-bound in the days ahead. They say the overall outlook for the Abu Dhabi market in the near-term is positive.

About 46.65 million shares worth about Dh111.34 million were traded. Of the 34 companies traded, as many as 10 rose, 17 fell and seven closed unchanged. Aldar Properties closed 2.59 per cent lower at Dh2.26. As many as 15.11 million Aldar shares worth about Dh34.11 million changed hands.

Gulf Cement Co. was the top gainer, rising 9.09 per cent to close at Dh1.57. The top loser was National Bank of Umm Al Quwain, falling 9.28 per cent to Dh2.15. Aldar was the most traded in terms of value and volume.