Markets Update: Markets slide ahead of a critical decision by index provider MSCI, hit by troubles battering global equities and the euro.
Euro takes a hammering and UAE stocks fall
The UAE's markets fell as the euro took a hammering on world markets, dispelling any lingering optimism ahead of a decision by MSCI over whether to upgrade the Emirates to "emerging market" status.
The Dubai Financial Market General Index fell 0.5 per cent to 1385.07, while the Abu Dhabi Securities Exchange General Index fell 0.2 per cent to 2442.82.
The euro fell 1.2 per cent to $1.3048, briefly falling below $1.30 for the first time since January.
After the "damp squib" of last weekend's eurozone summit, many investors were deserting the euro, said Neil Mellor, a currency strategist at BNY Mellon.
"People were genuinely convinced that they'd be able to pull something out of the hat," he said.
MSCI's decision on whether to upgrade the UAE and Qatar to "emerging market" status is due at 2am tomorrow morning. The most recent decision in June was postponed by six months to test both exchanges' market systems.
Prior to the announcement, exchange officials had signalled pessimism over the potential gains to be had by the UAE's markets in light of a slowdown hammering global stocks.
Stocks that have risen recently on speculation that the UAE would secure an upgrade were hit hard.
"Global markets were weak yesterday and continue to be weak today," said Yong Wei Lee, a fund manager at Emirates NBD. "There's evidence of some profit taking on companies like Emaar and Drake & Scull, they've had a fairly decent run in the last week."
In the capital, Etisalat's stocks fell 0.5 per cent to Dh9.51 each, their lowest since December 2009.
Asian stock markets slid in early trading, after the US Federal Reserve said it would hold fire and provide no new stimulus to the world's biggest economy at its latest policy meeting. European stocks followed, with the Euro Stoxx 50 index falling 1.4 per cent to 2,228.01.
Oil prices slumped, with Brent crude futures falling $1.17 to $107.78 per barrel. Gold prices held steady following a recent dip, with bullion trading at $1,639.00 per troy ounce.