Dubai: The Dubai index fell the most regionally on Wednesday as sell-off continued due to uncertainty on geo-politics after the United States walked away from the nuclear deal with Iran amid absence of fresh buying.
The Dubai Financial Market General Index closed 2.01 per cent lower to 2,889.70, after losing 4.6 per cent since the start of the month. The index registered its sharpest per centage fall since June 26 2016, when it fell 3.16 per cent.
Emaar Properties closed 4.91 per cent weaker to Dh5.04. Dubai Islamic Bank closed 1.60 per cent lower to Dh5.54.
“The uncertainty from geo-politics is driving the markets lower. The international investors were selling despite strong fundamentals, which shows that there were external factors at play,” Mohammad Ali Yasin, chief executive officer First Abu Dhabi Bank Securities said.
“Bluechips are being sold. The reason we don’t have the firepower of liquidity to offset that weakness. Liquidity is drying up. The problem is there are no buyers,” Yasin said.
Emaar Properties closed 5 per cent lower to Dh5.04, while Dubai Islamic Bank closed 1.60 per cent lower to Dh5.54.
DXB Entertainments shares traded higher despite sluggish sentiments elsewhere with heavy volumes. DXB Entertainments closed 0.53 per cent higher to Dh0.38.
“DXB Entertainments may test the resistance levels of Dh0.41/0.434 in the short term. Traders may look to buy and book profits on the given resistance levels,” Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities.
Negative sentiment
“The issue with our markets is not fundamental in nature. The negative sentiment is continuing. Uncertainty in geopolitical is not helping us, and we are not finding us a positive catalyst,” Yasin said. “We are getting into the Ramadan season. We see challenging in terms of liquidity in the next few weeks.”
Traders have been on the sidelines with traded value falling from a high of more than Dh1 billion to Dh300-350 million.
However, bucking the regional trend, the Abu Dhabi index closed up as traders bought back into banking stocks from lower levels.
The Abu Dhabi Securities Exchange index closed 0.16 per cent higher to 4,486.65. First Abu Dhabi Bank closed 1.75 per cent higher to Dh11.6. Bank of Sharjah rose nearly 1 per cent to Dh1.09. Elsewhere in the Gulf, Saudi Arabia’s Tadawul index closed 1.69 per cent lower to 7,878.29.
