Dubai index falls most this year

GEOPOLITICS TAKES A HEAVY TOLL, FORCING SELL-OFF DESPITE STRONG FUNDAMENTALS

The Dubai index fell the most across the region yesterday amid a continued sell-off fuelled by geopolitical uncertainty, following the United States’ withdrawal from the nuclear deal with Iran, and a lack of fresh buying.

The Dubai Financial Market (DFM) General Index closed 2.01 per cent lower at 2,889.70, after losing 4.6 per cent since the start of the month. The index registered its sharpest percentage fall since June 26, 2016, when it fell 3.16 per cent.

Emaar Properties closed 4.91 per cent lower at Dh5.04 while Dubai Islamic Bank (DIB) was down 1.6 per cent at Dh5.54.

“The uncertainty from geopolitics is driving the markets lower,” Mohammad Ali Yasin, chief executive officer of First Abu Dhabi Bank Securities (FABS) said. “International investors were selling despite strong fundamentals, which shows that there were external factors at play.”

“Blue chips are being sold. The reason [is] 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.

DXB Entertainments shares traded higher despite sluggish sentiment elsewhere with heavy volumes. The stock was up 0.53 per cent at 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, a senior analyst with FABS, said.

Negative sentiment

“The issue with our markets is not fundamental in nature. The negative sentiment is continuing. Uncertainty in geopolitics is not helping us, and we are not finding a positive catalyst,” Yasin said.

The Abu Dhabi index bucking the regional trend, closing in positive territory as buying brought back banking stocks from lower levels. The Abu Dhabi Securities Exchange index advanced 0.16 per cent to close at 4,486.65. First Abu Dhabi Bank (FAB) was up 1.75 per cent higher to close at Dh11.6, while Bank of Sharjah rose nearly 1 per cent to Dh1.09.

Elsewhere in the Gulf region, Saudi Arabia’s Tadawul index eased 1.69 per cent to close at 7,878.29.