Stock markets in the UAE slumped on Wednesday amid the continued bombardment of Iran by the US and Israel as well as Tehran’s retaliatory strike across Arab nations that have roiled global financial and energy markets.
On the first day of trading since the regional conflict in the Middle East began on Saturday, benchmark indexes in both Dubai and Abu Dhabi were sharply lower, led by property and banking shares.
The DFM General Index, the main equities gauge of the Dubai Financial Market, was down 4.64 per cent at 10.40am UAE time on Wednesday.
The benchmark gauge of the Abu Dhabi Securities Exchange, the second-largest Gulf bourse after Saudi Arabia with a market capitalisation of Dh3.02 trillion, dropped 3.52 per cent.
Emaar Properties, the largest listed developer in Dubai was among the biggest losers, sliding 4.94 per cent during early trade. Emirates NBD, Dubai's top-lender slipped 5 per cent, while Dubai Islamic Bank, UAE’s biggest Sharia-compliant slumped 4.9 per cent.
Sharjah-headquartered budget carrier Air Arabia was also trading about 5 per cent lower.
In Abu Dhabi, Aldar Properties fell most, shedding 5 per cent. Banking stocks also retreated, with First Abu Dhabi Bank slipping 4.99 per cent. Telecoms operator e& fell 4.93 per cent, while Adnoc Distribution slumped 5 per cent.
“Equity markets globally sold off sharply, with significant declines across US, European, Asian and regional UAE markets,” said Edward Bell, acting group head of research and chief economist at Emirates NBD.
Both DFM and the ADX did not trade on Monday and Tuesday, after the market regulator, the Capital Markets Authority, suspended trading.
The combined market capitalisation of the UAE exchanges stands at $1.1 trillion, the 19th highest in the world, and they carry a 1.4 per cent weight on MSCI’s emerging markets benchmark, according to Bloomberg data.
The suspension was another precautionary measure taken by authorities amid Iran's unprecedented strikes on the UAE, which the Islamic Republic says is in retaliation for US and Israeli attacks that began on Saturday.
The US and Israel are continuing their relentless bombing campaign in Iran, which has jolted energy markets as well as global equities. The deepening uncertainty is sending shock waves across the global economy as traders consider the prospects of a prolonged conflict in the region that could stoke global inflation and dampen growth.
