UAE index falls on economic growth concerns

Traders wait at the Bahrain Stock Exchange after Joe Biden won the U.S. presidency, in Manama, Bahrain November 8, 2020. REUTERS/Hamad I Mohammed

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June 17 (Reuters) – Stock markets in the United Arab Emirates closed lower on Friday, trailing global stocks as aggressive interest rate hikes around the world made investors jittery about global economic growth.

The Central Bank of the United Arab Emirates announced on Wednesday that it had raised its key rate by three-quarters of a percentage point to 3%, alongside the largest hike by the United States Federal Reserve since 1994, its currency being pegged to the dollar.

In Abu Dhabi, the index (.FTFADGI) fell 0.6% as the country’s largest lender, First Abu Dhabi Bank (FAB.AD), fell 1.1%, while Aldar Properties ( ALDAR.AD) fell 2.5%.

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However, Abu Dhabi National Hotel (ADNH.AD) jumped 2.8% after the Abu Dhabi Stock Exchange implemented an increase in the company’s foreign ownership limit to 100%.

The Abu Dhabi stock market fell as the mood among investors turned to caution while oil prices saw some volatility. The market could experience further declines under these conditions, said Eman AlAyyaf, CEO of EA Trading.

Dubai’s main stock market index (.DFMGI) fell 0.6%, pressured by a 2.8% decline in blue-chip developer Emaar Properties (EMAR.DU) and a 1. 9% from low-cost carrier Air Arabia (AIRA.DU).

Among other stocks, Shuaa Capital (SHUA.DU) lost 3.1%, its biggest intraday decline since Nov. 11, 2021, after the company replaced chief financial officer Joachim Mueller with Gunshyam kripa.

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Reporting by Mohd Edrees in Bengaluru, editing by Angus MacSwan

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