Stock exchanges in the United Arab Emirates declined on Friday, tracking oil prices on the prospect that oil shipping disruptions in the Red Sea may ease as Chinese officials have asked Iran to help rein in attacks on ships by the Iran-backed Houthis.
Adding to the market woes, Fitch Ratings said broader Gaza conflict fallout adds to risks for neighbouring sovereigns.
Oil price – a key catalyst for the Gulf’s financial markets – was down 0.58% at $81.95 a barrel by 1127 GMT.
Abu Dhabi’s benchmark index shed 0.6%, extending losses to the second session, dragged down by a 2.3% decline in IHC-owned investment firm Multiply Group and 1.7% loss in UAE’s largest lender First Abu Dhabi Bank.
Among other stock, Sharjah-based Dana Gas dropped 2.8%, hitting nearly a three-year low of 0.730 dirham a share after the firm said that a drone strike damaged a liquid storage tank at the Khor Mor facility in the Kurdistan Region Of Iraq.
Major Gulf markets slip on geopolitical tensions
Dana Gas said production was temporarily suspended to put out a fire, which was extinguished, and a resumption of operations was expected soon.
Abu Dhabi market could find some support if oil prices remain on an uptrend, although geopolitical tensions could continue to weigh on sentiment, said Daniel Takieddine, CEO of MENA at BDSwiss.
Dubai’s main index slipped 0.2% as top lender Emirates NBD Bank fell 1.6%, while low-cost carrier Air Arabia lost 1%.
The Dubai index notched up 2% on a weekly basis, while the Abu Dhabi index logged 1.5% weekly losses, according to LSEG data.