Dubai stocks fall to 9-month low in Gulf-wide sell-off

• DFM is down 15 percent this month
• ‘Impossible to predict market bottom’
• Abu Dhabi and Saudi indexes also drop

Dubai’s stock index tumbled further on Thursday, marking its second-biggest decline since the start of the Iran war to slump to a fresh nine-month low. 

The prolonged conflict sparked a Gulf-wide equity sell-off.

Iran attacked five ships in the Arabian Gulf on Wednesday, including two oil tankers, up from about one strike daily previously. Its blockade of the Strait of Hormuz, through which one-fifth of oil and liquefied natural (LNG) gas supplies transit, has led many Middle East oil producers including Kuwait and Iraq to reduce crude output.

The Islamic Republic has also launched strikes against civil and military targets in Middle East countries with a US military presence including the UAE, Qatar and Bahrain.

Dubai’s benchmark fell 3.6 percent to 5,518 points, its lowest close since June 2025, taking its losses to more than 15 percent this month. 

“The situation is so uncertain it’s impossible to predict where or when the markets will bottom out,” said Nishit Lakhotia, chief investment officer for equities at Bahrain’s Sico Bank. 

“So, as investors we should take positions in defensive stocks and those companies most likely to bounce back immediately after the conflict ends. It may also be wise to target stocks that have over-corrected as well as keeping some cash.

“The sensible approach is to stick to company fundamentals to gauge which are most immune to disruption, and which are most vulnerable and then position your investments accordingly.”

Further reading:

• Oil prices climb to three-day high on Iran war worries
• Frank Kane: The Hormuz bottleneck – something’s got to give
• Aramco says Red Sea pipeline can sustain exports – with limits

UAE real estate, for example, could be tricky to predict. Such sentiment seems evident in the struggles of Emaar Properties, which was again the most active stock by volume and value, plunging 4.9 percent.

The stock, Dubai’s bellwether, has fallen 29 percent this month, wiping $11.2 billion from the company’s market value, according to AGBI calculations.

“Even if there’s a ceasefire tomorrow, I doubt there are many prospective (property) investors willing to buy immediately – they’d prefer to wait to benefit from a potential price correction,” added Sico’s Lakhotia.

Dubai Electricity and Water (Dewa), which as a utility is usually perceived as a safer equity investment, fell 4.9 percent – one of 14 stocks to decline more than 4 percent.

Just 230 million shares changed hands on Dubai’s bourse, the lowest trading volume this week. This muted activity indicates there is little buying demand at current offer prices, with UAE markets’ temporary 5 percent downward daily stock movement limit – introduced this month – curtailing trading.

Abu Dhabi’s index fell 2.3 percent to 9,636 points, its biggest decline since last April and its sixth drop in seven sessions to slump to a nine-month low.

Aldar Properties, Abu Dhabi’s leading listed real estate developer, dropped 4 percent. Banks also fell. First Abu Dhabi Bank, Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank – the emirate’s three largest lenders by assets – each declined more than 4.5 percent.

Saudi Arabia’s index, which is up this month, outperforming its Gulf peers, also slid. The benchmark was down 0.5 percent at 12:29 GMT. Qatar fell 0.9 percent.