Dubai Shares Fall to 10-Day Low on Oil Drop, Euro Concern
Dubai’s benchmark stock index fell to the lowest level in 10 days as oil prices declined and investor concern that Europe’s debt crisis may worsen curbed appetite for riskier assets.
Shuaa Capital PSC (SHUAA), the investment bank controlled by Dubai’s ruler, plunged to the lowest level in more than three months. Gulf General Investment Co. (GGICO), a Dubai-based investment company, tumbled 9.8 percent. The DFM General Index (DFMGI) lost 0.3 percent to 1,470.61, the lowest since May 20, at the 2 p.m. close in the emirate. The measure fell 9.8 percent this month. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the six-nation Gulf Cooperation Council, fell 0.4 percent.
“Prices are falling on worries over Europe’s debt problems and falling oil prices,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. About 94 million shares were traded in Dubai, compared with a daily 12-month average of about 140 million shares, data compiled by Bloomberg show.
Oil decreased for a second day before a report that may show U.S. inventories rose to the highest level since 1990, signaling weaker demand for crude in the world’s top consumer. Crude for July delivery decreased as much as 2 percent to $88.94 a barrel in electronic trading in New York. The GCC, which includes Saudi Arabia, the United Arab Emirates, Oman, Qatar, Bahrain and Kuwait, is home to one-fifth of the world’s proven oil reserves.
Italy sold 5.73 billion euros ($7.1 billion) of bonds, short of its maximum target for the auction, as borrowing costs rose from the previous sale amid concern that Greece may leave the euro. Economic confidence in the euro area declined more than economists forecast in May to the lowest in 2 1/2 years after inconclusive elections in Greece raised the specter of a euro breakup.
The MSCI Emerging Markets (EEM) Index fell 1.2 percent and the Stoxx Europe 600 Index declined 1.1 percent.
Shuaa slid 7.3 percent to 65.1 fils, the lowest level since Feb. 9. Gulf General Investment tumbled to 26.6 fils. There are 100 fils to the dirham.
Abu Dhabi’s ADX General Index (ADSMI) retreated 0.2 percent and and Saudi Arabia’s Tadawul All Share Index fell 0.8 percent. Qatar’s QE Index was little changed and Kuwait’s gauge gained 0.5 percent. Bahrain’s index fell 0.3 percent and Oman’s MSM30 Index climbed 0.6 percent.
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