Stock markets in the United Arab Emirates fell sharply on Sunday as declines on global bourses sparked a broad sell-off in the Gulf region.
Dubai’s index tumbled 6.5 percent, its biggest daily decline since August 2013. Abu Dhabi’s benchmark, which is usually less volatile, dropped 3.5 percent, its worst day since January 2011.
Global markets took a hit on Friday as investors fled to the safety of government bonds after a raft of weak indicators from Europe and China collided with concerns about the U.S. Federal Reserve’s plans to reduce monetary stimulus.
Investors in the UAE took that as a cue to book profits, which at the end of the previous session stood at 47 percent year-to-date for Dubai and 18 percent for Abu Dhabi.
The pull-back then snowballed due to panic selling and, possibly, margin calls, according to market players.
“We might see some more profit-taking in the coming sessions,” said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi.
Elsewhere in the region, Saudi Arabia, which closes at 1230 GMT, was down 5.2 percent at 10,284 points. After breaking through immediate chart support at the September low of 10,614 points, the benchmark may test the 100-day average at 10,238 points.