Markets Update: Dubai's markets fall to within a few points of their lowest level all year after the UAE and Qatar fail once again to secure an upgrade to "emerging market" status by MSCI.
Markets fall as UAE remains on the trading frontier
The UAE's markets plummeted after the Emirates failed to secure an upgrade to "emerging market" status from MSCI, with stocks in Dubai falling to within a hair's breadth of their lowest level all year.
The index provider retained the UAE and Qatar as "frontier markets", saying it would review the decision in June next year - the third year in a row that MSCI has declined to reclassify the two countries since its consultation began in 2008.
The Dubai Financial Market General Index fell 1.8 per cent to 1,360.03, at one point trading within 14 points of the year's lows reached in November before rebounding.
The Abu Dhabi Securities Exchange General Index also sank, falling 0.7 per cent to 2,424.23.
Meanwhile, Qatar's QE Index dipped 0.5 per cent to 8,721.41.
Exchange officials said the UAE's markets were still on the right track, despite the disappointment over MSCI's decision.
"As MSCI has acknowledged, the UAE has made progress in improving its capital markets infrastructure," said Jeff Singer, chief executive of Nasdaq Dubai.
"These achievements will be recognised by industry organisations in different ways and at different times; more important is the UAE's continuing focus on giving investors the framework they are looking for to participate in the markets with confidence."
Emaar Properties was hardest hit in Dubai, with shares falling 3.6 per cent to Dh2.67 each. Blue-chip stocks such as First Gulf Bank, National Bank of Abu Dhabi and Etisalat fell in the capital.
Asian stocks were bruised in the early hours of the morning between falling Japanese business confidence and persistent eurozone worries, with the Nikkei 225 shedding 1.6 per cent to 8,377.37, and the Hang Seng index losing 2.1 per cent to 17,953.83.