Dubai index slumps to 10-week low

25/11/2009 00:00 AST

Dubais index fell to a 10-week low as traders sold stocks ahead of the Eid holidays in the absence of any positive local catalysts, while the link with global markets appears to be weakening.

Emaar Properties dropped 3.5 per cent to a 19-day low, while Dubai Financial Market fell 3.2 per cent as the four most active stocks all declined by 2 per cent or more. The other two top traders were Drake & Scull and Deyaar, which slid 3 and 2.8 per cent respectively.

"November has been a vacuum in terms of news to move the market and there isnt anyone to lead the market, whether its foreign or local institutions," says Mohammed Yasin, Shuaa Securities chief executive.

"Local speculators are active, but they are not getting the day trading returns they would when theres more liquidity.

"Volatility has declined since peaking in early November, with the market quietening down to move in a 1-2 per cent daily range."

Dubais index fell 1.93 per cent to 2,071 points.

"Its important for Dubai to hold above 2,000 points and maybe consolidate nearer to 2,100 points - a break below these levels may bring in bigger volumes going down and that would not be a good sign," says Yasin.

Dubais fall comes despite gains in the US overnight as the Dow Jones industrial average briefly hit a 52-week high and all three major benchmarks gained more than 1.2 per cent.

"The correlation with global markets is much less than it was before," adds Yasin.

UAE markets will be closed from November 26 to Novemeber 29 and from December 2 to December 3.

Reuters