Dubai: Weak oil markets rattled local and regional stock markets again.
Dubai stocks fell nearly 2 per cent on Wednesday along with other regional markets as falling oil prices continued to weigh on sentiment.
The Dubai Financial Market General Index closed 1.97 per cent lower at 3,513.95, after falling to a low of 3,509.08, its lowest level in nearly one week.
“Markets have been scary because of oil plus we had a very weak close in the US markets,” Sebastien Henin, head of asset management at The National Investor.
Wednesday’s more than 2 per cent fall in oil prices compounded an 8 per cent drop in Brent and US crude prices on Tuesday, which ended a 25 per cent three-session surge, the largest three-day gain since 1990.
“There has been specific developments like Emaar got hammered on Wednesday due to the news of falling real estate prices in Dubai.”
Emaar Properties, which has the highest weightage on the index, fell 5.06 per cent to end at Dh6.19. Another real estate firm Arabtec also fell 2.66 per cent lower at Dh1.83.
Stability:
“Investors are not inclined to come back to the market. They need more stability to come back, they need more stability. They need to see at which price oil will stabilise and then they might take a call on equity markets,” said Henin.
Volumes have fallen to Dh250 million from Dh1.5 billion in July.
Analysts expect oil prices, which have fallen more than 50 per cent in the past one year, to remain under pressure due to supply glut amid falling demand from key consumers like China.
Elsewhere in the US, stocks opened up almost 1 per cent, rebounding from steep losses a day earlier, after fresh intervention from China to support its markets helped calm jittery investors.
