Stock markets across the United Arab Emirates experienced notable declines following the United States' implementation of comprehensive tariffs on imports, intensifying fears of a global trade war and potential economic slowdown. The Dubai Financial Market's main index dropped 1.8%, with Emaar Properties tumbling 8.9%, marking its steepest decline since late 2021. Emaar Development also fell by 2.4%. In Abu Dhabi, the benchmark index decreased by 0.8%.
The downturn in UAE markets aligns with broader trends observed across the Gulf region. Saudi Arabia's main index declined by 0.4%, influenced by a 1.5% drop in Saudi National Bank and a 0.8% decrease in Saudi Aramco. These movements coincide with a 3% fall in oil prices, reflecting concerns over reduced fuel demand amid escalating trade disputes.
U.S. President Donald Trump's announcement of a baseline 10% tariff on all imports, with higher duties targeting key trading partners, has heightened investor anxiety. The measures have prompted fears of retaliatory actions from affected nations, potentially leading to a protracted trade conflict with widespread economic implications.
In the UAE, the real estate sector bore the brunt of the market downturn. Emaar Properties' significant drop is attributed to ex-dividend trading, while Emaar Development's decline reflects broader market apprehensions. Financial institutions also faced setbacks; in Abu Dhabi, First Abu Dhabi Bank and Abu Dhabi Commercial Bank recorded declines of 0.8% and 7.4%, respectively.
The imposition of tariffs has had a pronounced effect on investor sentiment in the Gulf region. The UAE's economy, heavily reliant on international trade and oil exports, is particularly susceptible to fluctuations in global trade dynamics. The recent market movements underscore the interconnectedness of global economies and the potential for policy decisions in one nation to reverberate across international markets.
Analysts suggest that the current market volatility may persist as long as trade tensions remain unresolved. The uncertainty surrounding the duration and intensity of the trade conflict contributes to cautious investor behavior. Market participants are closely monitoring developments, with a keen eye on potential negotiations or policy shifts that could alleviate the prevailing tensions.
Topics
Real Estate