Gulf markets continued their relentless downwards spiral today, after the false dawns of the UAE central bank's credit line and the US The GCC is now on course to wipe out all the gains it made on Saturday and Sunday, following the brief euphoria that accompanied the US government's planned $700bn (Dh2.6 trillion) bailout of investment banks' toxic securities. New York's Dow Jones market yesterday lost 3.3 per cent of its value, after the GCC had closed, on fears that the $700bn bailout will not be enough to stop the rot in the financial system or prevent a severe global recession.
Yesterday's announcement by the UAE that it would provide Dh50bn of loans to the country's banks produced little reaction in the markets - the Dubai Financial Market (DFM) lost 3.56 per cent, while the Abu Dhabi Securities Exchange dropped 2.84 per cent. With the exception of Doha, which gained 0.08 per cent, the rest of the GCC was down. Kuwait fell 2.04 per cent, Muscat was down 1.21 per cent and Bahrain suffered a 1.48 per cent drop.
A drop in value of this size for the DFM would ordinarily be regarded as significant, but this was only the second-largest one-day fall this month. The rest of the world has been plunging today, with all eyes now on the opening of New York this evening. The London FTSE index has lost 2.4 per cent of its value in morning trading, while the Hong Kong market shed 3.87 per cent and Singapore lost 2.66 per cent.