The Dubai Financial Market (DFM) could not sustain Mondays recovery yesterday, as late selling pressures wiped out early gains and pushed the general index lower by 10.78 points to 1784.45, a net loss of 0.60 per cent against the previous close of 1795.23 points.
The first half of the session saw positive global factors spurring most of the equities to move higher. The DFM general index added more than 0.50 per cent until the last hour of trading, when it shed its gains and closed in the red on a late selling spree.
"I think the markets are in a consolidation phase. Initial reactions to the deal between Emaar and Dubai Holding are easing off. The market is back to normal trading," Mohammed Ali Yasin, Chief Executive Officer, Shuaa Securities, told Emirates Business.
Of the six stocks that gained, only four closed with gains of more than two per cent.
Banking stocks came under pressure after the UAE Central Banks statement about the exposure of banks in the country to troubled Saudi Arabia-based Saad and Algosaibi.
The Central Bank Governor Sultan bin Nasser Al Suwaidis announcement impacted market sentiment. Ajman Bank fell 2.68 per cent and Dubai Islamic Bank 2.48 per cent, while Emirates NBD eased 0.57 per cent.
Amjad Bakir, Trading Manager at MAC Sharaf Securities, said: "The markets breath is still in a positive mode. Speculators who bought yesterday pushed the market up, and today its down because of speculative selling. I think, it will go up tomorrow."
Moodys has placed Shuaa on a possible ratings upgrade, as the Dubai-based investment firm and the Dubai Banking Group (DBG) have reached a deal with the intervention of the regulator.
"I dont think it will have any major impact on trading pattern as it was already factored in," added Yasin.
As expected, the index garnered support at the 1700-level. Within the first half hour of trading, the index showed 1784.62 points, which remained the days low, as the market moved marginally up to hit an intraday high of 1847.62 points at 1pm and later came under pressure. The last hour of trading eroded the early gains and pushed the index to the days low level again at the closing.
Mathew Wakeman, Managing Director for Cash and Equity-linked Trading at EFG Hermes, said: "Early strength in Dubai evaporated in the last hour of trading. We saw window smashing rather than dressing, but thats no surprise given the retail level of involvement in the market. Abu Dhabis gains are more to do with yesterdays average close being at lower levels than the last actual prices in the market, so giving a high percentage open today."