Banks drag down UAE stock-market indexes

UAE stocks fall heading into the weekend as investors are worried by bleak warnings about the global economy.

The Abu Dhabi Securities Exchange General Index closed down at 0.05 per cent at 2,599.64 points. Ravindranath K / The National
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UAE stocks headed into the weekend in negative territory as gloomy warnings about global growth weighed on sentiment.

The Abu Dhabi Securities Exchange General Index closed down at 0.05 per cent at 2,599.64 points, with the Dubai Financial Market General Index closing 0.5 per cent at 1,479.29.

"We have seen a bit of a sell-off in banking in Dubai and Abu Dhabi," said Haissam Arabi, the chief executive of Gulfmena Alternative Investments. "Coming into the weekend its usual to see a bit of a sell-off but volumes are still low."

Banking and energy were the worst-performing stocks in Abu Dhabi, with Dubai stocks also dragged lower by banks.

Overall, markets remain illiquid with hopes of a positive rebound after Ramadan fading fast.

Earlier, the Abu Dhabi and Dubai indexes had opened in split territory ahead of a day of big global financial news.

Abu Dhabi's index opened higher, with Dubai's benchmark lower. But both indexes were dragged into the red, however, after the Organisation for Economic Co-operation and Development warned western nations needed to act to bolster their economies.

Failure to respond would lead to their economies stagnating or going into reverse, it said.

Globally, Asian stock markets diverged between gains and losses before closing mainly higher. The MSCI Asia Pacific Index climbed 0.2 per cent to 121.94 in late afternoon trading in Tokyo yesterday.

Shares also opened higher in Europe in anticipation of the European Central Bank signalling an end to interest-rate tightening. European bank stocks, which have remained under pressure in recent days, were leading the rally.

US futures also advanced yesterday ahead of a much-anticipated speech by Barack Obama. The US president was expected to explain how the government will boost jobs and unveil a US$300 billion stimulus plan to boost the flagging US economy.