Rating agencies' negativity weighs on UAE market
Dubai shares traded downwards after US markets closed down 2 per cent Tuesday night on warnings by ratings agencies Moody's and Fitch of possible downgrades if lawmakers fail to enact debt reduction measures.
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Arabtec Holding, Dubai's biggest contractor, was down 1.4 per cent to Dh1.39 a share. Tabreed, the UAE-based district cooling company, was down 1.4 per cent to 99 fils a share. The Dubai Financial Market General Index was down 0.8 per cent to 1523.20 points, while the Abu Dhabi Securities Exchange General Index was flat at 2647.18 points.
"When there is no news locally, and you see the US markets trading down, the UAE almost always trades down in sympathy," said Julian Bruce, head of equity sales at EFG-Hermes Holding in Dubai.
In the US, The Standard & Poor's 500 Index declined 2.5 per cent to 1254.05 points on Tuesday, while the Dow Jones Industrial Average lost 2.1 per cent to 11866.60 points.
Moody's assigned a negative outlook to the Aaa rating, which means a downgrade is possible in the next 12 to 18 months. Fitch promised to conclude a more thorough review of the United States by the end of the month and did not rule out slapping a negative outlook on the rating.
Elsewhere in the region, Kuwait's index declined 0.1 per cent to 6068.10 points. Bahrain's benchmark was unchanged at 1285.63 points. Oman's measure lost 0.7 per cent to 5770.38 points. Qatar's index was down 0.4 per cent to 8390.17 points. The Saudi Tadawul All-Share Index was down 0.4 per cent to 6443.16 points.
Published: August 3, 2011 04:00 AM