Global factors will determine UAE stock prices

Dubai: The UAE markets are expected to remain subdued today as investors and market intermediaries await the fate of the US government sponsored $700 billion rescue package for the financial services sector.

With the markets set to close for the Eid holidays, analysts expect the mood to remain bearish.

"Currently, the market is fully focused on international events. With no development on the rescue package, the local markets have no clear direction," said P. Krishnamurthy, CEO of Dubai International Securities. "With holidays ahead, people are likely to close their open positions, which could mean more selloffs," he said.

Saudi Arabian shares fell sharply on Saturday, with the benchmark index closing at its lowest in almost 15 months, on concern that the US banking crisis will affect local lenders and liquidity ahead of the Eid Al Fitr holidays.

The Tadawul All Share Index declined two per cent to 6,993.13 in Riyadh, its lowest since July 3, 2007. The index has dropped 7.8 per cent in four trading days.

The UAE has lost more than Dh110 billion in market capitalisation since the beginning of September, and other Gulf markets have reported similar trends.