Dubai, Aug 11 (UNI) The Dubai Financial Market General Index yesterday plummeted 2.97 per cent, its biggest one-day drop in six months, falling 155.75 points to 5,094.56 and Abu Dhabi index also fell drastically over fears that Dubai property boom may not sustain.
The Abu Dhabi Securities Exchange Index slid 121.56 points or 2.55 per cent to close at 4,652.42 and the market capitalisation fell by 21.67 billion dirhams on the day.
Fears over the sustainability of property price rise in the UAE and whether banks are going to restrict lending to the real estate sector weighed on in the minds of the investors, the Gulf News said.
In Dubai, real estate stocks declined 3.98 per cent followed by the finance and investment sector, which lost 3.05 per cent.
Though it had the highest turnover of 178.36 billion dirhams, Emaar Properties which is planning to enter India in a big way with an IPO, was one of the major losers, declining 3.83 per cent to 10.05 dirhams.
Across the board indexes also declined in Saudi Arabia, Qatar and Bahrain.
Morgan Stanley last week issued a report warning property prices, particularly in Dubai, would come under pressure - it forecast a decline of 10 per cent - with an oversupply expected next year.
Also, the Abu Dhabi Chamber of Commerce and Industry published a report, saying that the banks should be careful in their exposure to real estate and construction sector to avoid the US scenario.
''I think there was some very aggressive selling from the GCC investors in real estate,'' said Julian Bruce, director of foreign institutional sales, EFG-Hermes.'' UNI XC SG DS1405