Dubai index neared a bear market territory post its near 7 per cent fall on Sunday, after tumbling crude oil prices sparked growth concerns, even as the local market joined sell-off witnessed in global markets on Friday.

The Dubai Financial Market General Index closed 6.96 per cent lower at 3,451.48, after hitting a low of 3,430.09, a level last seen in December last year.

The markets are still down more than 18 per cent from its 2015 high of more than 4,200, nearing the 20 per cent treshhold to be called a near market.

“This sell-off was driven by the meltdown in US markets on Friday and lower crude prices. The Dubai index is just near the bear market zone,” Mohammad Shabbir, head of equity funds & portfolios at Rasmala Investment Bank told Gulf News.

Most of the blue chips witnessed sharp cuts, with property stocks like Emaar Properties, Arabtec falling more than more than 8 per cent.

Emaar Properties ended down 8.31 per cent at Dh6.18, while DAMAC Properties closed 9.64 per cent lower at Dh3.

Sell-off overdone?

“Hopefully, markets should recover, I think the sell off has been overdone,” said Shabbir, adding “we should get back some of the losses that we saw over the past few days if oil prices start recovering.”

WTI Crude Oil fell below $40 (Dh147) per barrel in New York for the first time in more than 6 years on concern of demand damage and the growing global glut.

WTI prices are down 35 per cent since its June highs as producers continue to pump pushed prices deeper into a bear market. On Friday, WTI crude closed down 2.11 per cent at $40.45 per barrel, while brent crude closed down 2.49 per cent at $45.46. WTI may drop to $32 on the surplus, according to Citigroup Inc.

Dubai index was the best performing market earlier in the month, but is now down 26 per cent in the past one year.

Analysts are of the opinion that in the second half of the year, Dubai index may rise more compared to Saudi index on the back of positive steps taken by the government to remove subsidies on fuel oil, among other measures.

Elsewhere, the Abu Dhabi Securities Exchange General index closed 5.01 per cent lower at 4,286.49, after falling as much as 4,279.07.

Aldar Poperties closed more than 8 per cent down at Dh2.06, while Dana Gas closed more than 10 per cent lower at Dh0.45. Out of a total of 34 stocks traded on the exchange, shares of 30 declined, while the remaining 4 stayed steady.