World fears chill local stocks

UAE markets closed the week in the red after suffering a knock-on effect from global investor fears that the eurozone crisis has not been completely contained.

UAE markets closed the week in the red after suffering a knock-on effect from global investor fears that the euro-zone crisis had not been completely contained.

Bourses in Europe and the United States were still trading lower after investors in Spanish debt demanded a higher risk premium for the country's bonds, indicating concern about Spain's financial health.

"The Spanish bonds [yield rise] was not a surprise, given the debt levels coming through and unemployment at almost 24 per cent," said Saleem Khokhar, the head of equities at the National Bank of Abu Dhabi.

The Dubai Financial Market (DFM) General Index lost the most in five days to end the session down 0.99 per cent at 1,686.50.

The Abu Dhabi Securities Exchange General Index closed 0.19 per cent lower at 2,558.98.

"The UAE has probably been hit hardest [among local bourses] by the fall in global markets. We've seen a little bit of frost come out, but I think the correction will be mild," said Mr Khokhar.

West Texas crude dropped US$2.54 to $101.47 on news of higher oil stockpiles in the US. The spot price of a barrel of Brent fell 8 cents to $122.38.

Shares in the Palestine Stock Exchange, which on Wednesday became only the second listed bourse in the Middle East after the DFM, remained unchanged yesterday. Its stock closed at $5.07 each at the close after falling from $5.20 on its debut.

Saudi Arabia's Tadawul All-Share Index was closed yesterday.