10/02/2016 05:24 AST
Stock markets in the Middle East fell on Tuesday, erasing the prior session's gains, as risk appetite diminished following a slump in global shares.
Egypt's main index tumbled 2.8 percent to 6,004 points, erasing the prior session's gains as foreign funds redeemed shares, bourse data showed.
Commercial International Bank, a stock favoured by international fund managers, retreated 3.3 percent. Palm Hills Development declined 4.3 percent in heavy trade, after the real estate developer posted strong quarterly earnings early this week.
Egypt's central bank has been striving to maintain stability in the currency over the past several months, but foreign investors are still jittery about the possibility of a devaluation and the negative impact it would have on their investment returns and companies' earnings.
Sources told Reuters on Monday that General Motors had temporarily suspended its operations in Cairo because of the hard currency shortage — a sign of how serious the country's economic slump remains.
The Tadawul All-Share Index fell 0.5 percent to 5,874 points, after briefly trading in positive territory, as local traders cashed out of small and mid-cap stocks, which had helped lift the index 0.2 percent on Monday.
"It's a stock picker's market at this point," said a Jeddah-based stock broker. "Traders are buying speculative stocks to book a quick profit and either cash out or rotate into the blue- chips."
The majority of speculative insurance stocks retreated, with Al-Sagr Cooperative Insurance slumping 4.4 percent after it had jumped 8.1 percent the previous day.
Dubai's index dropped 1.0 percent to 3,065 points, but closed 42 points above its intra-day low. Blue-chip stocks were the main drag on the bourse, with Emirates NBD, the largest lender by assets, tumbling 4.5 percent. But some small and mid-cap stocks favored by local retail investors rose, with DAMAC Properties adding 4.8 percent, after falling by as much as 2.0 percent in early trade. Drake & Scull, a construction firm, added 1.2 percent.
In Abu Dhabi, the benchmark also fell 1.0 percent, weighed down by a sell-off in large-cap banks. Abu Dhabi Commercial Bank fell 3.4 percent and National Bank of Abu Dhabi lost 2.1 percent.
United Arab Emirates stock markets, however, have recovered in recent weeks from multi-year lows hit in mid-January. Abu Dhabi and Dubai, down 5.7 and 2.7 percent respectively in 2016, have outperformed both their regional peers and crude oil prices this year.
Arab News
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