Dubai: The main equity indices in Abu Dhabi and Dubai fell more than a per cent on Sunday as economic and geopolitical uncertainty continued to cast a dark shadow on investor sentiment and on liquidity in the region.

The Dubai Financial Market (DFM) index fell 1.07 per cent to reach 3,423.12 as most stocks ended in the red, while the Abu Dhabi Securities Exchange (ADX) general index fell 1.12 per cent to 4,279.31.

Marwan Haddad, lead portfolio manager at Al Mal Capital, pointed that a lot of the selling pressure on Sunday came from GCC investors who are likely concerned about the short-term impact of Saudi Arabia’s anti-corruption crackdown.

“Sentiment is very weak, and investors are nervous after what happened in Saudi Arabia. Liquidity is weak as well, and there are more sellers than buyers. I think the market will probably take another week or two to find a new base,” he said.

Earlier this month, Saudi Arabian authorities arrested a number of princes and former ministers on corruption charges, following the establishment of a supreme committee to fight corruption in public finance.

“Over the medium term, it’s a very positive story when you’re cracking down on corruption. We should also expect a decent expansionary budget from Saudi Arabia, and that should help the market,” Haddad said.

Other stock markets in the Gulf also ended the day in the red, with Saudi Arabia’s Tadawul index 0.6 per cent lower at 6,872.16, and Kuwait’s main index down 0.74 per cent to 6,262.39.

In company-specific movement in the UAE, GFH Financial Group was the most actively traded stock on DFM, accounting for 31 per cent of the Dh444 million traded in the market. Its share prices inched down 0.61 per cent.

Drake and Scull International ended flat, while Emaar Properties and Dubai Islamic Bank fell 1.15 per cent and 0.66 per cent.

Al Mal’s Haddad said while geopolitical news is expected to impact investor sentiment going forward, fundamentals in the market were strong, and valuations are attractive. He described the UAE’s equity market as being almost the cheapest in the region in terms of valuations, with companies such as Emaar, DP World, and Aramex having attractive valuations.

In Abu Dhabi where stocks were also mostly in the red. Etisalat was the most actively traded stock in the market, with its share prices falling. Aldar Properties slid 1.35 per cent, as First Abu Dhabi Bank fell 0.49 per cent, and Abu Dhabi Commercial Bank ended flat at Dh7.1.

Meanwhile, Dana Gas’s share prices lost 4.2 per cent after the English High Court on Friday ruled against the company and in favour of holders of the company’s bonds.