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Dubai: Continuing negative sentiments leading to panic selling reversed two days of slight gains with Dubai and Abu Dhabi markets falling more than two per cent on Wednesday.
The decline in the markets have confounded some analysts and they see the positive side of the trend.
"We do believe that there is no rational explanation of what is happening at this stage," said Rami Sidani, head of Mena funds, Schroders Investment Management.
"There is panic in the market and short-selling by some international investors is aggravating the situation. So when the rebound will happen it will much more stronger because they will have to cover the short. This phase may turn out to be great buying opportunity."
The Dubai Financial Market General Index slid 2.58 per cent to 4,365.84 with bank and real estate stocks bearing the brunt of the selloff. The bank index fell 2.52 per cent and real estate index dropped 3.74.
Volumes traded tumbled 22 per cent to 261.73 million shares.and total value traded decreased 10 per cent to Dh1.12 billion.
"Stocks [on DFM] went higher on lower volumes initially, but later fell on bigger volumes indicating bearishness," said Shiv Prakash, equity investment technical analyst, Mac Sharaf Securities in his daily report. "Consistent selling still persists and one has to be very cautious in the market although the fundamental story still remains intact."
Abu Dhabi Securities Exchange Index lost 93.46 points or 2.23 per cent to end at 4,089.46. Real estate and banks suffered with the respective indices declining 5.75 per cent and 1.41 per cent.
Emaar tumbles
Emaar Properties, the day's most liquid stock with a turnover of Dh352.53 million, tumbled to a 41-month low, losing 2.85 per cent to close at Dh7.85. It touched an intra-day low of Dh7.62.
Union Properties and Deyaar Development lost 8.62 per cent and 3.98 per cent respectively.
"Emaar as usual is just sliding and witnessing a free fall from every resistance," said Prakash. "It was tipped to see lower levels a few days back."
Dubai Islamic Bank and Emirates NBD also dropped, closing 4.48 per cent and 2.94 per cent lower to Dh6.61 and Dh9.90. Tamweel lost 4.04 per cent to Dh4.99, taking its two day losses to 8.10 per cent.
In Abu Dhabi, Aldar closed 6.21 per cent down to Dh8.15. Sorouh dropped 5.21 per cent to Dh6.18. First Gulf Bank and Abu Dhabi Commercial Bank retreated 6.52 per cent and 4.19 per cent to end at Dh18.65 and Dh3.89 respectively.
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