Fed's gloom affects Gulf stocks

Gulf markets edged lower yesterday after the US Federal Reserve on Wednesday signaled a weaker economic outlook for the world's largest economy.

Dubai's benchmark, the Dubai Financial Market General Index, fell for the second day this week. AP Photo
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Gulf markets ended the trading week on a low note after the US Federal Reserve said itforecast "significant downside risks" in the US.

Dubai's benchmark, the Dubai Financial Market General Index, fell for the second day this week, ending 0.8 per cent lower yesterday to 1,460.29 points. Construction and property stocks led the declines.

Arabtec Holding was down 0.7 per cent to Dh1.36 a share. Shares of Union Properties, the developer of Dubai's MotorCity, fell 3.3 per cent to 35 fils a share.

Weak economic conditions also sparked a global stock market retreat yesterday.

The Federal Reserve said in Washington on Wednesday it would extend the average maturity date in its portfolio by buying US$400 billion of long-term debt while selling an equal amount of shorter-term security. "There's an aggressive sell-off across the board, the euro, commodities, gold, anything related to risk," said Marwan Shurrab, the chief trader at Gulfmena Investments in Dubai.

"Any new announcement about further intervention from European Central Bank or a European body to contain debt issue would be perceived as a possible event, if nothing happens we'll continue with this uncertainty."

In the capital, Aldar Properties was down 2.4 per cent to Dh1.20 a share. Sorouh Real Estate lost 1.7 per cent to Dh1.13.

Elsewhere in the region: Kuwait's index declined 0.6 per cent to 5,916.20; Bahrain's bourse lost 0.9 per cent to 1,245.01; Oman's measure dropped 0.7 per cent to 5,699.29; Qatar's benchmark fell 0.6 per cent to 8,444.79 points.

The Saudi Tadawul was closed for the day.