Abu Dhabi: Stock indices from Europe to Asia declined yesterday as the euphoria over a $1 trillion package to prevent the spread of Europe's debt crisis dissipated and the euro slipped again.
Investors were concerned that the emergency lending package for European countries will hamper growth and the contagion resulting from Greece's fiscal troubles will spread. Doubts also persisted on the ability of the euro zone countries to cut swelling budget deficits and mounting debt.
In afternoon trading in Europe, France's CAC 40, Britain's FTSE 100 and Germany's DAX were all lower. In Asia, Japan's Nikkei index closed 1.1 per cent lower and the Hang Seng in Hong Kong ended down 1.7 cent.
The Dubai Financial Market (DFM) index slipped back into negative territory yesterday after Monday's gains, led by profit-taking by investors in real estate major Emaar's shares. The Abu Dhabi Securities Exchange index too, fell.
Financial markets worldwide had rallied on Monday after the euro-region countries announced their unprecedented package to salvage the euro. Greece's debt problems have for several months threatened to wreak havoc on global financial markets, with the contagion of Greece's debt now looking more likely to spread to Portugal, Spain, Italy and Ireland, thus threatening the nascent global economic recovery from the deepest recession since the Great Depression of the 1930s.
UAE bourses
The DFM index fell 1.96 per cent to 1,706.58 on Tuesday. The absence of domestic catalysts has contributed to the downtrend in recent months on the Abu Dhabi market.
The ADX general index closed 0.23 per cent lower at 2,788.48 yesterday, the decline being led by industrial, real estate and banking stocks.
Market analysts say until there's news on Dubai World's debt restructuring talks with its lenders, the investors are unlikely to be drawn to the UAE markets in a big way. Foreign money inflows into local stocks have come down.
