All sectors apart from healthcare retreated, with real estate, energy and banking putting the greatest pressure on the general index. However, the decline came on low turnover as 175.3 million shares with a total value of Dh277.6 million changed hands. Real estate stocks Rakprop, Aldar and Sorouh and energy stocks Dana, Taqa and Aabar accounted for almost 75 per cent of turnover.
Invest Bank was the biggest loser among banking stocks as it retreated 8.84 per cent to close at Dh1.60. First Gulf Bank (FGB) retreated 2.52 per cent to close at Dh13.55 after it announced new buyback of its shares. FGB said it had bought back a total of 18.4 million shares with SCA's approval. The bank said it bought 290,000 shares last Thursday at an average price of Dh13.90. FGB has permission to buy 119.1 million shares. The ADX witnessed the same trend as the DFM as strong selling pressure was felt by leading active stocks. Analysts expect the ADX to continue to move in the same direction as the DFM in the near future.
"The ADX is trading near the 21-day moving average and could go down to its support level of 2,680 points in the coming few sessions," said Amjad Bakir, Trading Manager at Mac Sharaf Securities.
Aldar and Sorouh were trading near important support levels of Dh3.90 and Dh3.06 respectively, he added.
"The coming sessions will be critical for both stocks to determine their trend in the next few weeks. They will also affect the ADX's trend."
Oil prices critical for GCC markets
Corrections in most GCC markets during the past few sessions are expected to intensify due to the bearishness of oil prices.
Oil prices might fall to $65 per barrel and this would have a negative impact on the GCC equity markets, said Amjad Bakir of Mac Sharaf.
"The level of liquidity in regional markets has a strong correlation with oil prices," he said. "When oil was trading above $71 we witnessed very strong liquidity in GCC markets as investors were bullish and sentiment that high oil prices would support regional economies was strong."
However he said oil prices were expected to go down to around $64-$65 in the short term – and this would affect sentiment.
"Liquidity in GCC markets started to decline sharply when oil traded below $70 at the end of last week. Oil prices will be critical in determining the pace of the current corrections in regional markets."
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