Dubai: The Dubai bourse’s main index followed in the same footsteps of its international peers on Wednesday, falling by 1.25 per cent as investor sentiment dampened on weak economic data.
The Dubai Financial Market (DFM) index slid to 2,744.18, with most stocks ending lower. Emaar, which was the most actively traded stock on the bourse, fell by 4.76 per cent. The decline in Dubai came after the main indices in the US fell by over a per cent as the latest manufacturing index showed contraction in the industry.
The negative sentiment triggered by the data spread to Europe, where French and German indices were also down by more than a per cent, but not before passing by the White House where President Donald Trump blamed the Federal Reserve for the disappointing figures.
Trump said in a tweet that the Fed “have allowed” the dollar to get so strong, hurting manufacturers. “Fed rate too high,” he added, continuing his calls to the country’s central bank to cut interest rates further.
The data added to concerns about the growth of the US economy — concerns that have already led the Fed to cut interest rates twice this year — as well as earlier concerns about the European economy.
In Dubai, traded values remained low, with just Dh153 million traded in the bourse. In Abu Dhabi, the main index also slid, by 0.46 per cent, still staying above the psychological 5,000-mark. The index ended at 5,030.86, with weak trade values.
Naeem Aslam, chief market analyst at Think Markets in London, said that the US manufacturing data could be the very reason for a rally in equity markets.
“The bad news is bad for the time being. However, this could change rapidly if speculations start to grow for another interest rate cut by the Fed,” he said in a note. “This could happen as early as Friday, the day when we will have the US [non-farm payrolls] readings followed by the Fed chairman’s speech.”