There was little respite in the capital, with the Abu Dhabi Securities Market dropping 1.57 per cent.
The latest decline means Dubai shares have lost Dh53.7bn since trading opened on Wednesday, with almost half of these losses sustained yesterday.
International investors have been blamed for the sudden downturn in the UAE and wider Gulf exchanges, as overseas funds sell shares to cover losses elsewhere.
“For international institutions, the UAE is just one of many markets to invest in and they have taken a decision to reduce their equity positions across all emerging markets,” said Chahir Hosni, EFG Hermes sales manager.
Stocks are in freefall across the globe, with fears of a US recession heightened amid disappointment over US President George W Bush’s tax plan to revive the ailing American economy.
Bush has proposed Dh550bn worth of tax cuts for consumers and businesses, but analysts claim that at just one per cent of US gross domestic product, this move is too little too late for the US to escape recession. This pessimism sparked yesterday’s rout, dealers say, and the UAE’s stock market woes were repeated across Europe, Asia and the Arab world, with the Indian Sensex the headline loser after it plunged 7.4 per cent.
Closer to home, the Qatar and Egypt exchanges both fell by more than four per cent, while the Saudi bourse lost another 3.4 per cent.
American stocks escaped, for one day at least, because of a US holiday. “What happened yesterday had nothing to do with specific markets or specific stocks,” said Hosni. “Almost all emerging markets fell significantly. The declines show that investors believe a US-led global recession will hit companies across all sectors,” he said.
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