Dubai stocks continue slide; down 5.2pc
Dubai, August 28, 2013
Dubai's stock index tumbled 5.2 percent in the opening minutes of trade as Syria tensions and the weakness of equity markets around the world prompt heavy selling by retail investors.
The index sank to a six-week low of 2,416 points. It plunged 7.0 percent on Tuesday as margin calls hit individual investors, who scrambled to lock in some of the market's big gains this year; the index is still up 49 percent in 2013.
The market has broken technical support at the 2,500-point level, where it peaked in June and found support in July. The next support is the 100-day average, now at 2,341 points.
Abu Dhabi's market, where short-term speculators have been somewhat less active than in Dubai, is down 2.1 percent. Kuwait is off 1.9 percent and Oman is 1.1 percent lower.
Meanwhile, Asian equities are at a seven-week low and MSCI's emerging market index is down 1.0 percent on Wednesday morning.
Many analysts believe the retail investor-driven panic in the Gulf was overdone because local economies are strong; because of their current account and budget surpluses, and currency pegs to the US dollar, they are much better insulated than most regions from the problems in emerging markets globally.
Also, it is not clear that an escalation of the war in Syria would have any direct political or military impact on the Gulf, where some governments including Saudi Arabia have already been supporting the Syrian rebels. - Reuters