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Tue 22 Jan 2008 01:47 PM

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Gulf markets continue freefall

Markets witness another day of losses as investor fears hit region, foreign-facing firms lead declines.

Gulf stock markets continued their freefall on Tuesday as global investors dumped more risky investments - spurring the biggest declines in Arab benchmarks since the 2006 stock market crash.

Dubai's main index lead the retreat, tumbling more than 9% to a three-month low in early trading, and heading for its biggest one-day loss since March 2006.

The index was down 7.46% to 5,141.27 points in early trading, while Oman's benchmark fell 8.08%.

Abu Dhabi's index fell 6.9% to a six-week low of 4,465.68 points, while Qatar's dropped almost 7% and Saudi Arabia's 5.8%.

Stocks that had rallied on foreign buying suffered the biggest losses, with Emaar Properties plunging 10% in Dubai and Aldar Properties falling more than 9% in Abu Dhabi. Commercial Bank of Qatar (CBQ) dropped 10%, the maximum allowed in one trading day.

Shares of Dubai Ports World also plunged on almost 17% on the Dubai International Financial Exchange (DIFX) to a record low of 85 US cents.

DP World had raised almost $5 billion in November by offering shares for $1.30, in the Middle East's largest initial public offering (IPO).

Egypt's benchmark stock index also dropped more than 5% in early trading on Tuesday, extending Monday's slide, which was the steepest in more than 18 months.

Lebanon's index dropped nearly 3% as the Gulf sell-off exacerbated concerns over the political crisis.

US president George W. Bush last week said the world's largest economy, hit by a subprime mortgage crisis and an ensuing credit crunch faced the risk of an economic downturn.

This statement sent global markets tumbling on Monday, which sparked the sell-off on markets in the region.

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