DUBAI: Most Middle East shares fell Tuesday as signs of a slowdown in the U.S. economy caused anxiety on global markets and prompted local investors to book profits, but Dubai’s bourse bucked the trend as shares in construction companies rallied.
Saudi Arabia’s benchmark lost 0.4 percent with heavyweight sectors of banks and petrochemical shares weighing.
World shares fell after U.S. manufacturing activity slowed sharply last month, dealing a blow to markets already worried that the U.S. Federal Reserve’s decision to taper its asset purchases would lead to capital flight from emerging markets.
“Sentiment is bearish on emerging markets and we’re seeing some of that,” said Asim Bukhtiar, head of research at Riyad Capital.
“Investors are looking at international market headlines but there’s also a growing focus on individual stocks,” Bukhtiar added.
Smaller-cap stocks led trading volumes, a usual trend on the market in times of slow local news flow.
Bukhtiar said there had been a lot of speculative activity on the market in the post-earnings and dividends season, but longer-term investors were adjusting positions for anticipated growth later this year.
In Egypt, Cairo’s benchmark index tumbled 1.6 percent, down for a second session since Sunday’s 45-month high.
“The profit-taking pressure was apparent on the market today, which had overheated in recent days,” said Ahmad Abu Taleb, assistant vice president of brokerage at Pharos Securities.
In Qatar, the benchmark lost 0.8 percent, while Abu Dhabi slipped 0.4 percent in its second decline since Sunday’s five-year high.
Dubai’s bourse, meanwhile, rose 1 percent to 3,812 points as retail buying returned to property-related shares in what was a shorter trading session due to a technical malfunction.
The index gained for a second session in the last five but fell just short of Jan. 29’s 63-month intraday peak of 3,855 points.
Shares in builder Arabtec surged 11.1 percent on what traders said was accumulation by a bulk buyer.
The company announced a $6.1 billion agreement with Abu Dhabi state fund Aabar Sunday to build 37 new towers.
“Arabtec broke a technical resistance at 4.50 dirhams on heavy volumes to touch the target of 5 dirhams – it’s mainly retail trading again,” said Hisham Khairy, head of trading on the institutional desk at MENA Corp.
Union Properties rose 2.5 percent.
Retail buying returned midsession despite a negative global backdrop. Trading was suspended 30 minutes before the normal session-end because of a system malfunction, the bourse said, and the session was not extended afterward.