Markets Update: A down day for global equities weighed on sentiment in the Gulf, but Dubai defied the gloom to end the trading session with a late rebound.
UAE markets drop as concerns rise over Euro zone
A down day for global equities weighed on sentiment in the Gulf, but Dubai defied the gloom to end the trading session with a late rebound.
In the capital, declines at Abu Dhabi’s banking heavyweights weighed on the wider market index.
The eurozone crisis was once again in focus of global investors after voters in France rejected austerity by electing socialist candidate François Hollande as president, while Greece’s ruling coalition lost its parliamentary majority.
Gulf investors began the trading day to a rout on Asian markets, which plunged on concerns that the eurozone sovereign debt crisis was entering a new phase.
European markets encountered a mixed session, reversing early losses later in the trading day.
The results of the election had thrown into turmoil some of the certainties surrounding the eurozone debt crisis, particularly policymakers’ focus on deeply unpopular austerity measures.
More investors were likely to remain on the sidelines until clarity emerges on European governments’ policies, said Tariq Qaqish, deputy head of asset management at Al Mal Capital.
“Previously, we had consistent news from Europe on how they were going to behave,” he said. “Now with the French president changing and the Greek election, we don’t know how they’re going to react.”
Markets were anxious to see how Mr Hollande behaves in office and how that differs from his statements on the campaign trail, Mr Qaqish added. Mr Hollande had previously vowed to renegotiate the eurozone’s fiscal compact.
“The uncertainty is going to keep markets on the fence,” Mr Qaqish said.
Elsewhere in the Gulf, all other markets fell except for Kuwait. The Saudi Tadawul All-Share Index closed 0.2 per cent lower at 7,358.87.
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