UAE indices broke their two-day winning streak yesterday amid the back-and-forth of threats between US President Donald Trump and Iran of further escalation, with broad-based selling taking place across both the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX).

Dubai’s main index slipped 2.7%, while Abu Dhabi’s benchmark fell 1.6%, as disruptions tied to the Strait of Hormuz continue to weigh on sentiment — pushing Dubai’s YTD losses to 10.7% and Abu Dhabi’s to 5.9%.

Declines were widespread on the DFM. Heavyweights like Emaar Properties (-4.6%) and Emirates NBD (-4.9%) dragged the index, with the sell-off also extending across smaller names.

The ADX saw heavy selling across banking stocks and large caps. Declines were led by Aldar Properties, First Abu Dhabi Bank, and Abu Dhabi Ports Company, all down 5%. Gains were selective, with Fertiglobe up 5.7% and Adnoc Distribution gaining over 2%, with limited breadth.

The bigger picture

UAE markets saw around USD 750 mn in net foreign outflows last week, making them among the most affected across the region, Ibrahim Masood, head of equities at Mashreq, said during a webinar (watch, runtime: 31:31). The UAE saw the most outflows by a wide margin, followed by Kuwait at USD 100 mn. Saudi Arabia, on the other hand, saw net inflows of over USD 40 mn.

This is mostly driven by Emirati oil exports’ exposure to oil disruptions, with sectors like real estate and financial services also suffering from a growing risk-off sentiment.

“We expect the UAE to remain under pressure, with financials, real estate, and industrials continuing to face stress from ongoing investor risk-off sentiment,” Masood added.

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