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March 24 (Reuters) – United Arab Emirates shares extended losses on Friday, dragged down by a string of ex-dividend trades, while lower oil prices and concerns over the stability of the global banking sector also weighed on investor sentiment.
Daniel Takieddine, chief executive of BDSwiss Middle East and North Africa, said the UAE stock market, along with major global markets, was under pressure as interest rate hikes and concerns about the banking crisis and global growth unnerved local and international investors.
Oil prices – the main catalyst for Gulf financial markets – fell sharply on Friday, with Brent down $2.50, or 3.3%, to a barrel at 1031 GMT amid falls in European bank shares and oversupply concerns $73.41.
Meanwhile, the Central Bank of the United Arab Emirates on Thursday raised Its benchmark interest rate was raised by 25 basis points to 4.9%, in line with the Fed’s hikes, as most Gulf Cooperation Council (GCC) countries, including the United Arab Emirates, have their currencies pegged to the dollar and typically follow the Fed’s policy moves.
In Dubai, the main stock index (.DFMGI) Ends 0.4% lower, weighed down by lender Dubai Islamic Bank falling more than 5% (DISB.DU)its biggest intraday drop in 10 months, as it traded ex-dividend.
However, the index edged up 0.1% for the week after two straight weeks of losses.
Abu Dhabi Index (.FTFADGI) It fell 0.5% for a second straight session, pressured by a 2.2% drop in its biggest lender First Abu Dhabi Bank (FAB.AD).
Real estate developerAldar Properties (ALDAR.AD) and ADNOC distribution (ADNOCDIST.AD)ex-dividend trading fell 3.4% and 3.7% respectively.
The index fell 1.5% for the week, its second straight weekly loss.
Reporting by Shamsuddin Mohd in Bengaluru; Editing by Anil D’Silva
Our standards: Thomson Reuters Trust Principles.
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