DFM Slump
Spate of weak banking sector results pulled down stocks at DFM on Monday. Image Credit: Ahmed Ramadan/Gulf News

Dubai: Trading on UAE indices were bogged down by profit declines at the country’s banks, after Emirates NBD reported a drop in first-quarter income on higher impairment charges.

Dubai Financial Market (DFM) index dropped 1.4 per cent to 1,887 points, while Abu Dhabi Securities Exchange (ADX) fell 2.8 per cent to 3,969 points.

Shares of Emirates NBD, which fell as much as down 2.3 per cent in early trade, settled down 0.6 per cent. The lender said its first-quarter net profit declined 24 per cent year-on-year due to higher provisions incurred in anticipation of the impact of the new coronavirus outbreak on credit conditions.

The impairment charges weighed on other bank stocks - shares of Dubai Islamic Bank were down 1.1 per cent, alongside UAE’s largest lender First Abu Dhabi Bank, which dropped 4.6 per cent. Also following suit was ADCB, down 3.6 per cent, and ADIB, which slipped 0.3 per cent.

Caution gripped UAE investors on rising expectations that a busy week of corporate earnings reports will drive home the damage done by the global virus lockdown, while a glut of supply sent US crude spiraling to 20-year lows.

The West Texas Intermediate (WTI), the US benchmark, fell more than 19 percent to $14.73 a barrel in early trade, before markets steadied and it clawed back some ground to $15.78 a barrel.

The stream of bad news was enough to put an end to a nascent rally seen in markets the last few sessions.