Sept. 3 (Bloomberg) -- Dubai’s benchmark index tumbled to the lowest in seven weeks, erasing a gain, after RIA Novosti reported a missile launch in the Mediterranean.
The DFM General Index lost 3.7 percent to 2,489.38, the lowest close since July 16. The measure plunged as much as 5.3 percent after the Russian report and had increased as much as 1 percent before. Abu Dhabi’s benchmark index lost 1.8 percent. Emaar Properties PJSC, the developer of the world’s tallest tower, slid 5.4 percent and discount carrier Air Arabia PJSC fell to the lowest since July 29.
Russia’s missile tracking system detected the launch of two ballistic rockets in the central Mediterranean, heading toward targets in the eastern Mediterranean, Russia’s state-run RIA Novosti reported, citing Defense Minister Sergei Shoigu. Shares trimmed declines after RIA said the missiles had landed in the water. The Israeli Defence Ministry later said the launch was a test. Last week, Dubai’s benchmark had the biggest weekly plunge since 2011 on fears of a military strike against Syria.
“This gives us an indication of how the Dubai market will react in case of a real strike,” Montasser Khelifi, a senior manager for global markets at Quantum Investment Bank Ltd., said in an e-mail today. “Dubai is the biggest hub in the region and its economy relies on some sensitive sectors such tourism, or air transport” and will be affected in case of a military conflict, he said.
Dubai is home to Emirates, the world’s biggest airline by international passenger traffic, the Dubai Mall, the world’s largest by area. The economy of the emirate is rebounding from the 2009 crisis amid a recovery in real estate and tourism.
Emaar Properties fell to 5.57 dirhams. Air Arabia dropped 4.4 percent to 1.3 dirhams.
Saudi Arabia’s Tadawul All Share Index declined 1.3 percent, Kuwait’s benchmark index dropped 1.7 percent, Qatar’s QE Index retreated 0.9 percent, Oman’s gauge fell 0.5 percent and Bahrain’s lost 0.4 percent.
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