Dubai index too joins global market sell-off, hits 2-year low

Dubai: Dubai stocks were not untouched from global markets sell-off, and its main gauge fell to its lowest level in two years on Thursday.

The Dubai Financial Market General Index closed 3.64 per cent down at 2,815.45, after hitting a low of 2,802.40, a level last seen in 2014.

“Dubai index may hit a new low of 2,718 by next week. I think we would breach this support and during this quarter we may see new low of 2,480 by March,” Osama Al Ashri, member of British organisation, Society of Technical Analysts.

Equity markets all across the gulf has been witnessing widespread selling pressure due to concerns of a slowdown in China, along with weakness seen in crude oil space.

“The sell-off is still related to the volatility that we saw across equity markets in the morning. We have not even seen a technical rebound so far,” said Sebastien Henin, head of asset management at The National Investor.

In stocks specific action in local equity markets, Arabtec was the most active stock in terms of volumes in trade and closed 9.45 per cent lower at Dh1.15. Emaar Properties also tumbled in trade, closing 5.76 per cent lower at Dh4.58. Gulf Finance House closed 5.10 per cent lower at Dh0.484.

Negative outlook

“I have a negative outlook for Arabtec and the stock may fall to Dh0.75, said Al Ashri, adding Emaar Properties may hit a new low of Dh4.11. Gulf Finance House will go down with the market, and may witness support at Dh0.42/0.39,” said Al Ashri, adding Dubai Islamic Bank has hit a double top on the long-term chart and the stock hit a new low of Dh4.8 in the next week.

Dubai Islamic Bank closed 2.86 per cent lower at Dh5.43, while Amlak Finance closed 8.73 per cent lower at Dh1.15. Amlak Finance may hit a new target of Dh0.97 by next week or so, said Al Ashri.

Almost all the stocks in trade closed in red.

In Abu Dhabi, the general index closed 1,6 per cent lower at 3,955.10. Abu Dhabi Securities General Index may hit a new low of 3,719 within few weeks, while strong support exist at 3,571, said Al Ashri.

First Gulf Bank closed 2.67 per cent at Dh10.95, while Aldar Properties closed 6 per cent lower at Dh2.

First Gulf Bank may hit a new low of Dh10.07 by next month, said Al Ashri, adding if Aldar Properties breaches support level of Dh2, we may see new levels of Dh1.47.

Volatility:

“The volatility would continue next week as well. The factor which triggered this volatility are still there. China, emerging markets and crude oil markets, plus Iran might come back in the oil markets, and trigger additional oil supplies. So we may see volatility to persists in coming days and weeks,” Henin said.

Market participants would also eye the fourth quarter and annual earnings from banks and construction companies to see the impact of lower oil prices if any. Most companies in the UAE and the wider gulf region had posted weaker than expected third quarter results.

Elsewhere in the region, Saudi Arabia’s Tadawul index closed 3.31 per cent lower at 5,838.13, while Qatar index closed 2.34 per cent lower at 9,185.12.

“If TASI index breaches the support 5,789, we may see further downside to 5,000,” said Al Ashri, adding Qatar index may reach support level of 8,333.

Muscat Securities MSM 30 index closed 1.67 per cent lower at 5,112.52. Kuwait Stock Exchange index closed 1.63 per cent lower at 5,265.94. Bahrain bourse index closed almost flat at 1,200.91.