DUBAI, UAE – UAE stocks dropped early on Sunday, mainly dragged by the increasing tension between the US and Iran following the reports of the death of a top Iranian general after a US airstrike near Baghdad Friday morning.
Major indices in the UAE stock market witnessed a sharp decline on Sunday as market players grow increasingly anxious over the escalating geopolitical tensions. The Dubai Financial Market General Index dropped under 2% as all other shares, except for Tabreed, were trading in the negative level Sunday morning. The top index settled at 2,706.97 points during the early trading session.
Among the biggest losers for the day are Dubai Entertainment, Shuaa Capital, Ithmaar, and Gulf Navigation. Each stock lost between 5% to 10% during the early morning trade.
Most blue-chip stocks were also down for the day. Emaar stock prices dropped by around 2.5%, while Emirates NBD went down by 2.3%. Dubai Islamic Bank also recorded a 2% decline early on Sunday, a 4% drop on Deyaar stock price, and the Arabtec losing by around 3.1%.
Meanwhile, the Abu Dhabi Securities Exchange was trading at 5,035.48 points, following a 1.34% decline. Out of 21 traded stocks, 20 companies were seen trading in red Sunday morning. Among the top losers in the exchange were Eshraq, Agthia, Al Qudra, Dana Gas, and Waha Capital, with each of their shares plunging to as deep as 2.9% to 6.7% during the first two hours of the trading session.
According to a statement from Allied Investment Partner, the escalating geopolitical tensions and uncertainty in the market could negatively affect market player sentiments going forward and could cause rising volatility in the short-term.
Especially for the Mena region, market players could easily turn cautious following the rising risk in the geopolitical environment, and any headline suggesting its escalation could provide pressure on regional equities to go down said the Allied Investment Partner.
Further, other GCC indexes also took the burnt of the recent headlines on Sunday morning, a majority of the regional indices were also seen trading lower. The benchmark index in Saudi Arabia dropped by around 2%, while the Kuwait index opened by 3.4%, and the Qatar index went down by 2.5%.
The recent downward pressure in UAE stock indexes came after reports of the death of Qassem Soleiman, a prominent Iranian General, due to a US airstrike in Iraq. It was then followed by a statement and warning from the Iranian President Hassan Rouhani saying that while the US won’t get the brunt of their mistake today, but they will in the coming years.