Dubai: The main equity indices in both Dubai and Abu Dhabi fell by over 1 per cent on Tuesday amid selling activity on some of the markets’ biggest stocks.
The Dubai Financial Market (DFM) index dropped by 1.35 per cent to end at 2,739.7 as Emaar’s share prices declined by nearly 5 per cent. Meanwhile, the Abu Dhabi Securities Exchange (ADX) index slid 1.16 per cent to close at 5,075.14, driven by declines on Etisalat’s and First Abu Dhabi Bank’s stocks.
In Dubai where total trade values were still relatively low for the day, Emaar’s share prices ended at Dh4.21. Analysts said the selling activity was due to technical calls, after share prices breached their support level of Dh4.40.
And though Emaar was the main stock dragging the main index lower due to its weightage, most other stocks were also in the red. Arabtec ended 3.14 per cent lower, while Damac fell by 2.55 per cent. Overall, 22 of the 31 stocks traded in Dubai on Tuesday ended lower.
Shiv Prakash, senior analyst at First Abu Dhabi Bank Securities, pointed in a note that the DFM index has breached its support level of 2,760.
“As the support is now breached, the question is how far can the index go lower and at what point the bottom shall be formed. Every recovery in the recent past attracted renewed selling pressure and forced the index to close lower,” the note said.
With the exception of Dubai Islamic Bank and Emirates NBD, most of the other stocks are seen as forming a bearish pattern, creating pressure on the index, Prakash said.
He added that the next support level targets for the DFM index are 2,710, and then 2,680, which is where the index seems to be headed in the coming weeks.
In the UAE capital, FAB’s share prices fell 1.95 per cent as Etisalat’s dropped by 1.33 per cent. Aldar Properties, however, gained 1.73 per cent.