Weak sentiment wipes out gains

Dubai: The Dubai stock market's recent gains were wiped out as negative sentiment hit the Gulf Cooperation Council (GCC) when US jobless claims reached a 26-year high and oil prices fell to $66.65 (Dh244.81).

The Dubai Financial Market index fell 3.57 per cent to close at 1,756.16, and the Abu Dhabi Securities Exchange benchmark declined 1.28 per cent to close at 2,637.18. Market capatalisation lost Dh7.58 billion to Dh391.24 billion.

Among the big market movers, Emaar fell 7.14 per cent to Dh2.64, its highest fall in the past month. The developer on Saturday announced the closure of its Algerian office.

The stock declined 12.77 per cent in one week after news broke that it might merge with other large real estate companies in Dubai.

"Due to a lack of prog-ress which is beyond the company's control, the office set up to drive these projects forward has now been closed.

"Algeria offers robust growth opportunities and Emaar is open to investments in the country in line with its long term strategy of developing its projects in international markets," it said in a statement.

Arabtec saw losses of 4.68 per cent to Dh2.65, while Deyaar Developer retreated 5.13 per cent to Dh0.74. Drake and Scull International closed down 2.2 per cent to Dh0.89. The DFM stock fell 5.26 per cent to Dh1.62.

"Jobless claims in the US were worse than expected and the worst in 26 years. That put a damper on any hopes for an earlier recovery. On the back of that, naturally, oil prices react negatively, the dollar strengthens and GCC equity markets are linked to that. It is to be expected that we would see an impact," said Haisam Arabi, chief executive and fund manager of Gulfmena Alternative Investments.

He said that while the markets have reached a technical support level, after gains from the recent rally being washed away, the prices would stabilise until the second quarter results are revealed.

"These [second quarter results] are now more important than ever."