Emaar Properties, the emirate's largest listed firm, tumbled 6.9 percent
Dubai's bourse tumbled in early trade on Tuesday after the price of Brent crude oil hit a new five-year low of $65.33 per barrel, prompting fresh selling by panicky retail investors.
The main Dubai index dropped 4.2 percent to 3,862 points, nearing major technical support at 3,731 points, its July low.
Emaar Properties, the emirate's largest listed firm, tumbled 6.9 percent to 7.75 dirhams, falling below its June low of 7.95 dirhams, a major technical support.
"Crude and technicals" dominate investors' attention right now, said Sanyalak Manibhandu, manager of research at NBAD Securities in Abu Dhabi; Dubai is suffering because it is one of the most liquid markets in the region, he said.
"People wanted to take a bet in this region, they went to Dubai - now they're panicking."
Many analysts think that because Abu Dhabi, Saudi Arabia and other big Gulf oil exporters have huge fiscal reserves, they will continue spending heavily despite oil's drop, so the regional economy will stay strong - and Dubai will continue prospering.
But oil's slide has been so sudden that retail investors are rushing to take profits on Dubai's big gains of the past 18 months.
The sell-off is again making stocks attractive from a valuation perspective, but investors are only likely to start accumulating early next year, Manibhandu said.
Other Gulf markets also fell on Tuesday morning, but not so sharply. Abu Dhabi was down 0.5 percent, Kuwait lost 0.6 percent and Oman's index slipped 0.2 percent.
"Many analysts think that big Gulf oil exporters have huge fiscal reserves, they will continue spending heavily ......"
ANS: This time situation is much different than before. IT's over supply problem from Russia, USA etc and it would continue which would lead to low oil prices for the unforeseeable future. Projects would be curtailed and cannot continue at the same pace like before especially considering that the oil price have fallen over 45 percent from its peak levels.
This article fails to mention that the Dubai stock market has been steadily dropping and it has dropped more than 15% in the last month alone. The reasons are obvious: Oil prices dropping more than 40% in few weeks and expected to drop another 20% and stay that way for a couple of years, turmoil in the region soon to include a bankrupt Iran, Russia's demise, Europe on a wheelchair and slowing Chinese and Indian economies. In short, a world-wide deflation is upon us, so why would the GCC stock markets recover? Sorry to say it, but given the existing conditions, economies relying on tourism and oil will be suffering for quite a while to come.