Dubai: Dubai stocks headed for the lowest in a week on bets the United Arab Emirates will miss an upgrade to emerging market status at MSCI Inc. and after Spain's rating cut fueled concern the global economy is slowing.

Emaar Properties PJSC, developer of the world's tallest skyscraper in Dubai, fell 1 percent. Arabtec Holding Co., the U.A.E.'s biggest construction company, was set for the lowest close in a week. The benchmark DFM General Index decreased 0.8 percent to 1,466.09 at 11:30 a.m. in Dubai, poised for the lowest close since June 7. The measure has gained 0.2 percent this week. The Bloomberg GCC 200 Index was little changed as Qatar's stock market retreated.

MSCI, the index provider whose stock indexes are tracked by investors with about $7 trillion in assets, will release the results of its classification review on June 20. The U.A.E. and Qatar are up for a potential upgrade from frontier market status after failing to secure the promotion twice last year as investors cited concern about a settlement system and foreign ownership limits.

"Now that investors know when the decision will be announced the pessimism is starting to emerge; it's unlikely that the U.A.E. will secure an upgrade" as not much has changed since December, said Ziad Dabbas, a financial analyst at National Bank of Abu Dhabi PJSC, the U.A.E.'s second-biggest bank by assets. "The correlation with global markets on the downside is also ongoing; investors would rather wait for developments in Europe ahead of a long weekend." Markets in the U.A.E., Kuwait and Oman will be closed June 17 for an Islamic holiday.

Trading Volumes Tumble

Trading volumes in Dubai have retreated this year amid Europe's worsening debt crisis. About 18 million shares traded in the emirate so far today, compared with a six-month daily average of 202 million. An upgrade of the U.A.E. at MSCI would likely draw more investors as fund managers buy their shares to mirror MSCI's indexes.

Dubai, the second-largest of seven sheikhdoms that make up the U.A.E., relies on trade, tourism and property for growth. The MSCI Emerging Markets Index decreased 0.6 percent and the Stoxx Europe 600 Index fell 0.5 percent after Moody's Investors Service cut Spain's credit rating three steps to Baa3, one level above junk. Spain is on review for a further downgrade, Moody's said. U.S. stocks yesterday dropped after retail sales declined in May for a second month, prompting economists to cut forecasts for economic growth.

Emaar fell to 2.86 dirhams, while Arabtec decreased 0.7 percent to 2.83 dirhams, set for the lowest close since June 7.

Elsewhere in the Persian Gulf region, Kuwait's measure lost 0.6 percent, Qatar's QE Index declined 0.2 percent and Abu Dhabi's ADX General Index slipped 0.1 percent. Bahrain's measure advanced 0.8 percent and Oman's MSM30 Index gained 0.1 percent.