A plunge in Dubai stocks this week underlined the risks behind the Gulf’s equity market rallies, although most analysts do not think Dubai’s drop marks the start of any extended downtrend.
The main Dubai index posted its largest drop in over two years on Wednesday as weak global stocks prompted traders to take profits in the emirate. The index lost 4.8 per cent to 1,608 points, reducing its gains from a seven-year low hit in mid-January to 24 per cent.
Dubai stocks fell more than nine per cent, including property developer Deyaar and Dubai Financial Market. With stock valuations not expensive historically and Dubai’s economic outlook for this year still positive, many analysts think the market’s uptrend may resume sometime in coming weeks or months.
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