Markets Wrap: Stocks decline amid investor concern over the looming $600 billion fiscal cliff in the United States.
Abu Dhabi and Dubai markets dip ahead of US fiscal cliff
UAE bourses dipped yesterday, tracking global markets, after investor attention turned towards the United States and its looming fiscal cliff.
"The focus is outside on the fiscal cliff and how the US government will lobby and reach an agreement that all parties will accept," said Marwan Shurrab, the chief trader at Gulfmena Investments in Dubai.
Policymakers in Washington need to come up with a plan to implement nearly US$600 billion in spending cuts and tax increases due in January - without crashing the economy. US stock markets declined last week, with the S&P 500 Index and Dow Jones Industrial Average accumulating the biggest losses since June.
"Valuations and third-quarter earnings have been strong in the UAE so far, maintaining the support for the market on a medium-term basis, with consolidation trade around these levels until we see a clear picture on the international arena," said Mr Shurrab.
Ajman Bank closed 6 per cent higher to Dh1.06 even after it denied retail investors' speculation that a strategic investor was building up shares in the company.
"The bank has no plans or desire to enter into a strategic agreement with any party, internally or externally," it said. "The bank continues to progress according to its strategic plans, and there is no need for any financial partner, or other, to implement the strategic plan."