Abu Dhabi Stocks Slump to Seven-Month Low on Europe Debt Concern
Stock Chart for National Bank of Abu Dhabi PJSC (NBAD)
Abu Dhabi’s benchmark stock index slumped to the lowest in almost seven months as oil fell amid mounting concern Europe won’t be able to resolve its debt crisis, threatening global growth.
The benchmark ADX General Index (ADSMI) slipped 0.2 percent to 2,531.88, the lowest since March 3, at the 2 p.m. close in Abu Dhabi. The measure is down 6.4 percent this quarter. National Bank of Abu Dhabi PJSC (NBAD), the United Arab Emirates’ second-biggest bank, fell to the lowest since April. First Gulf Bank PJSC (FGB), the lender owned by Abu Dhabi’s ruling family, dropped 1 percent. About 37 million shares traded in Abu Dhabi today, compared with this year’s daily average of 69 million shares, according to data compiled by Bloomberg.
Emerging markets declined as they traded for the first time since U.S. Treasury Secretary Timothy F. Geithner said that failure to combat the Greek-led turmoil threatened “cascading default, bank runs and catastrophic risk.” Billionaire investor George Soros said “something needs to be done” to safeguard Europe’s banks because Greece may be unable to avoid default.
“Negative international sentiment is looming in the market today especially after the lack of initiative that we saw from the meetings in Washington,” said Samer Darwiche, a financial analyst at Gulfmena Investments in Dubai.
Pacific Investment Management Co., which runs the world’s biggest bond fund, is forecasting that advanced economies will stall over the next year as Europe slides into a recession, underscoring mounting investor concern about the global economic outlook. The MSCI Emerging Markets Index dropped 0.8 percent at 4:45 p.m. in Dubai. The Stoxx Europe 600 Index declined as much as 1.4 percent before rebounding.
Crude for November delivery fell as much as 3.4 percent to $77.11 a barrel on the New York Mercantile Exchange on speculation the European crisis will cut demand. Gulf Arab oil exporters, including the U.A.E. and Saudi Arabia, supply about a fifth of the world’s oil.
Gold and silver also tumbled for a fourth day, with immediate-delivery gold falling as much as 7.5 percent to $1,532.72 an ounce.
National Bank of Abu Dhabi lost 0.5 percent to 10.5 dirhams, the lowest since April 7. First Gulf Bank declined to 14.45 dirhams, the lowest since March 7.
Bahrain’s BB All Share Index declined 0.1 percent and Qatar’s QE Index (DSM) fell 0.2 percent. Oman’s MSM 30 Index slipped 0.3 percent, while Kuwait’s gauge rose 0.4 percent. Dubai’s DFM General Index (DFMGI) was little changed and Saudi Arabia’s Tadawul All Share Index (SASEIDX) gained 0.3 percent.
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