UAE markets open lower after closure following Iranian strikes
Unlike European markets, UAE stock exchanges began trading on Wednesday with a sharp decline after a two-day pause. The closing of trading followed reports of Iranian strikes on the Gulf state, further heightening investor nervousness amid the escalation of the regional conflict, CNBC informs.
Highlights
- Dubai and Abu Dhabi markets resumed trading after a two-day closure.
- Dubai index dropped 4.7%, marking its largest drop since May 2022.
- Abu Dhabi index fell 3.6%, its sharpest decline since May 2022.
- Both exchanges temporarily set a lower price limit for securities at -5%.
Sharp drop after a two-day pause
The Dubai and Abu Dhabi exchanges reopened on Wednesday after a two-day trading halt. The pause was caused by an “unprecedented wave” of Iranian missile and drone strikes on Sunday, leading investors to wait for clarity regarding the extent of the damage.
In this context, the Dubai index fell 4.7% during the session—its largest intraday drop since May 2022. The Abu Dhabi index dropped 3.6%, also marking the sharpest decline since May 2022.
Stocks that pulled down the indices
The decline was broad-based, and pressure on the indices was exacerbated by heavyweight stocks. In Dubai, leading the decline were real estate developer Emaar Properties (down 4.9%) and budget airline Air Arabia (down 5%).
In Abu Dhabi, the biggest factor was the drop in the largest bank in the country, First Abu Dhabi Bank, whose shares fell by about 5%.
What markets will monitor next
The UAE’s reaction shows how quickly geopolitical risk can transform into market premiums: the 4.7% drop in Dubai and 3.6% in Abu Dhabi coincided with the return of liquidity after the forced pause and the reassessment of risks by market participants.
An additional signal for investors was the Abu Dhabi Securities Exchange’s requirement for issuers to immediately assess their financial and operational exposure and promptly disclose any material information that could impact market decisions.
We also informed European stocks open higher despite ongoing Middle East conflict.
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