Stock markets in the UAE slumped on Wednesday amid the continued bombardment of Iran by the US and Israel, and Tehran’s retaliatory strikes across Arab nations that have roiled global financial and energy markets.
On the first day of trading since the conflict in the Middle East began on Saturday, benchmark indexes in 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, closed the session 4.71 per cent lower 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, ended the day 1.9 per cent lower after falling more than 3 per cent earlier.
Emaar Properties, the largest listed developer in Dubai, was among the biggest losers, sliding 4.93 per cent during early trade. Emirates NBD, Dubai's top-lender slipped 5 per cent, while Dubai Islamic Bank, UAE’s biggest Sharia-compliant lender, slumped 4.94 per cent.
Sharjah-headquartered budget carrier Air Arabia was also trading about 5 per cent lower.
In Abu Dhabi, Aldar Properties fell the most, shedding 5 per cent. Banking stocks also retreated, with First Abu Dhabi Bank slipping 4.99 per cent. Telecoms operator e& fell 4.4 per cent, while Abu Dhabi Ports fell 4.8 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 Tehran says is in retaliation for the US and Israeli attacks that began on Saturday.
The bombing campaign in Iran 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 worldwide inflation and dampen growth.
Mixed bag
Elsewhere in the Gulf region, most equity markets posted marginal gains in thin trading on Wednesday.
Saudi Arabia’s Tadawul, the biggest bourse in the Middle East by market capitalisation, advanced 0.6 per cent, led by refiner Yansab, Saudi Chemical Company and developer Jabal Omar.
QE Index, the main gauge in Doha, rose 0.45 per cent during early trade, helped by transport and real estate stocks.
The gauge representing property stocks advanced 1.59 per cent, while the transport index of the Qatar Exchange gained 1.1 per cent.
Kuwait's All Share Index was trading 0.37 per cent higher. The equity gauge in Oman rose 0.1 per cent and the main stock market in Bahrain fell by 0.24 per cent.
Globally, Asian markets also fell as investors grappled with mounting uncertainty over the duration of the war and inflationary pressures.
