A slump in oil price weighed on Dubai's equities yesterday as the stock market fell to its lowest point in more than three weeks
Investors rattled by falling oil prices
Dubai's market slumped to its lowest in more than three weeks as a drop in oil prices shook investor sentiment.
The Dubai Financial Market General Index fell nearly 1 per cent to 1,591.75 points and the Abu Dhabi Securities Exchange edged 0.4 per cent lower to 2,685.71 points.
Oil had its biggest weekly decline in more than two years last week as the death of Osama bin Laden and a strengthening dollar prompted a sell-off in commodities. Brent crude closed 1.5 per cent down at US$109.13 a barrel on Friday.
But market commentators said a correction in local markets had been due, following the recent rally in equities.
"We needed a breather," said Saleem Khokhar, a senior fund manager at National Bank of Abu Dhabi.
"Volatility is definitely going to play a part but I have been expecting a small correction for a few weeks."
Sachin Mohindra, the lead manager for Invest AD's GCC Focus Fund, said local markets would be volatile in the short term because sentiment affected crude oil prices. But he added there was still a "good opportunity for medium and long-term investors", with petrochemical companies benefiting from strong demand.
Emaar Properties slumped 1.6 per cent to Dh3.14, the first day of trading after the company said it had formed a team of senior managers and external consultants to develop a five-year action plan.
Saudi Arabia's market recovered from Saturday's sell-off and traded 0.7 per cent higher to close at 6,623.55 points.
* with additional reporting by Hadeel al Sayegh