The Abu Dhabi Securities Exchange (ADX) could not sustain itself near its support area of 2700 points yesterday and made a break downwards, opening the way to the next support level of 2550-2600 points.
The ADX index fell 33.16 points, or 1.22 per cent, to 2674.04 points yesterday amid low turnover and selling pressures on leading active stocks in the real estate and energy sectors. The ADX went down for the fifth consecutive session yesterday, extending it losses to 3.66 per cent on very low turnover as 42.6 million shares worth Dh105.2 million changed hands.
Aldar, Sorouh and Rakprop went down yesterday by 2.16, 1.91 and 1.79 per cent respectively. Real estate stocks exerted the highest pressures on the ADX yesterday with expectations of further pressures.
"Aldar and Sorouh were leading movements on the ADX for the past three months. They are expected to continue leading the trend in the near future. They are facing downward pressures and this is expected to affect the whole market," said Wadha Al Taha, a senior market analyst.
Ahmed Tabbo, Financial Analyst at Darahem Brokerage, said the downturn in Aldar was the main driver of the ADX's decline, as the stock has turned very bearish in the past few weeks. "Aldar is moving in a long downturn channel and this is affecting the general sentiment in the market. Real estate stocks in general are pushing the market downwards."
Heavyweight etisalat added to the pressures on the ADX after it went down slightly to close at Dh10.95.
Energy stocks in the ADX are facing downward pressures due to worries among investors about their earnings, said Ahmed Tabbo. Aabar, Dana and Taqa turned bearish and lost 2.52, 2 and 5.60 per cent respectively yesterday.
"Despite oil and gas prices increasing in global markets, and high expectations of energy companies achieving profits this year, expectations are high that these profits will be limited.
"According to statements for the first three quarters of 2009, energy companies achieved limited profits because of high operating costs," said Tabbo.
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