Dubai’s shares headed for the lowest level in four months as oil prices fell and investor concern that Europe’s debt crisis may worsen curbed appetite for riskier assets.
Shuaa Capital PSC (SHUAA), the investment bank controlled by Dubai’s ruler, plunged to the lowest level in more than three months. Gulf General Investment Co. (GGICO), a Dubai-based investment company, tumbled 6.8 percent. The DFM General Index (DFMGI) lost 0.9 percent to 1,461.88, poised for the lowest close since Feb. 2, at 12:36 p.m. in the emirate. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the six-nation Gulf Cooperation Council, fell 0.1 percent.
“Prices are falling on worries over Europe’s debt problems and falling oil prices,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. About 49 million shares were traded in Dubai, compared with a daily 12-month average of about 140 million shares, data compiled by Bloomberg show.
Oil decreased for a second day before a report that may show U.S. inventories rose to the highest level since 1990, signaling weaker demand for crude in the world’s top consumer. Crude for July delivery decreased as much as 1.3 percent to $89.63 a barrel in electronic trading in New York. The GCC, which includes Saudi Arabia, the United Arab Emirates, Oman, Qatar, Bahrain and Kuwait, is home to one-fifth of the world’s proven oil reserves.
Italy plans to sell as much as 6.25 billion euros ($7.8 billion) of bonds today, testing investor demand at a time when Europe’s debt crisis shows signs of worsening. Economic confidence in the euro area declined more than economists forecast in May to the lowest in 2 1/2 years after inconclusive elections in Greece raised the specter of a euro breakup.
The MSCI Emerging Markets (EEM:US) Index fell 1 percent and the Stoxx Europe 600 declined 1 percent.
Shuaa fell 5.8 percent to 66.1 fils, the lowest intraday level since Feb. 12. Gulf General Investment tumbled to 27.5 fils. There are 100 fils to the dirham.
Abu Dhabi’s ADX General Index retreated 0.2 percent and and Saudi Arabia’s Tadawul All Share Index fell 0.1 percent. Qatar’s QE Index rose 0.1 percent and Kuwait’s gauge gained 0.2 percent. Bahrain’s index advanced 0.2 percent and Oman’s MSM30 Index climbed 0.6 percent.
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