Markets dive on violent protests

Dubai’s main index dropped 1.8 per cent to 1,562.92 points to a two-week closing low. Property-related stocks led the drop. Emaar Properties fell 2.8 per cent, Drake & Scull dropped 1.3 per cent and Arabtec declined 4.7 per cent, down for a sixth straight session to hit a seven-month low.

Abu Dhabi’s benchmark index ended 0.33 per cent lower at 2,597.58 points. Sorouh Real Estate and Dana Gas dropped 1.7 per cent and 2.3 per cent, respectively.

In regional markets, Kuwait’s measure slipped 0.3 per cent to 5,910 points, down from Monday’s three-month high. Saudi market dropped 1.42 per cent to 6,878.72 points, Qatar’s index eased 0.2 per cent to 8,535 points, while Oman’s market traded flat.

Across the world shares retreated as the euro hit a two-week low amid popular opposition within the eurozone to austerity measures. A general strike in Greece and signs of discord among top eurozone officials over new policies to tackle the crisis added to investor concerns, taking the gloss off recent moves by the European Central Bank to calm the markets by buying bonds.

Agencies reported that global markets were also reacting to a letter from Germany, Finland and the Netherlands on Tuesday that implied that any rescue funds Spain receives for its banks will remain part of its public debt.

Spain’s IBEX index led the list of fallers, trading 3.3 per cent lower at 7,903 points. Germany’s DAX was 1.8 per cent lower at 7,295 points while the CAC-40 in France fell two per cent at 3,443. The FTSE 100 index of leading British shares was down 1.2 per cent at 5,787.

The drop marked a sharp end to weeks of upbeat investor sentiment. Markets have been buoyant since the European Central Bank unveiled in August a plan to lower the borrowing rates of countries like Spain and Italy and prevent a breakup of the 17-country eurozone. Fresh stimulus measures from major central banks also boosted sentiment.

On Wall Street, the Dow Jones industrial average opened flat at 13,457 points while the broader S&P 500 index fell 0.1 per cent to 1,440 points. The MSCI world equity index was down 0.8 per cent at 332.23 points.

Earlier, Asian stock markets fell after the worst sell-off in three months on Wall Street as pessimism about world growth spread across the Pacific.

Japan’s Nikkei 225 stock average closed down two per cent at 8,906.70 points and Hong Kong’s Hang Seng dropped 0.8 per cent to end at 20,527.73 points. South Korea’s Kospi shed 0.6 per cent to 1,980.44 points, China’s Shanghai Composite Index fell 0.6 per cent to 2,004.17 and Australia’s S&P/ASX 200 dropped 0.5 per cent to 4,351.90 points.

• issacjohn@khaleejtimes.com