DUBAI - The Dubai and Abu Dhabi benchmarks ended lower for the sixth session in eight on Thursday as most Gulf Arab bourses declined, tracking renewed weakness on international markets ahead of the release of U.S. jobless data.
"The global economy is still on drip feed, which is worrying when you think Lehman's collapse was more than a year ago," said Keith Edwards, head of asset management at Doha-based investment company The First Investor.
UAE stocks stuttered, again giving up much of the previous day's gains to leave Dubai down 4.5 percent for the week, while Abu Dhabi has lost 3.4 percent over the same period.
Property-related shares were the hardest hit, with investors trying to reduce positions in subdued trading as Dubai's volumes slumped to a seven-week low.
Emaar Properties fell 3.5 percent, Arabtec slid 3.8 percent and Deyaar lost 2.7 percent.
World markets fell on Thursday, with investors reducing positions ahead of the release of U.S. jobs data later in the day, while U.S. stocks also ended Wednesday on a weak note after a Federal Reserve policy statement said it was keeping interest rates at near-zero for 'an extended period'.
Low rates are normally a boon for equity markets, but analysts said investors were more concerned with the gloomy tone of the statement, which dampened hopes for a swift economic recovery.
"The correlation between Gulf and U.S. markets has been exaggerated -- we've faced selling pressure all week after U.S. markets fell sharply last Friday," said Mohamed Abu Ghoush, head of equities brokerage at Ahli Bank.
"It's time for Gulf investors to realise this is an overreaction and start rebuilding positions at these lower levels - today's seller might be tomorrow's buyer."
Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading, offered a similar outlook, but warned global markets would continue to dictate direction in the absence of local drivers.
"It still looks like a strong end to the year but with some rocky patches along the way such as this week. Sentiment remains bullish and that is key," said Wakeman.
Industries Qatar rose 0.7 percent after the company said a new plant would almost double the production capacity of its unit, Qatar Fertiliser Co (Qafco).
"If Qafco can guarantee the sale of this new urea capacity, this should be very positive for the company's revenues and bottom line," said Hala Fares, an analyst at Shuaa Capital.
Zain fell 3.3 percent, a day after European telecoms operator Millicom said there could be opportunities to pick up some of its Kuwaiti rival's African assets.
Millicom Chief Executive Mikael Grahne declined to say whether the firm was in talks with Zain.
"I can't comment on details. But there is a reasonable likelihood that something will happen around the assets," he told Reuters on Wednesday.
The stock is down 28 percent from a 12-month high hit on Sept. 7, the day before major shareholder Kharafi group said it had agreed a deal to sell a 46-percent stake in the Kuwaiti operator to a consortium led by India's Bharat Sanchar Nigam.
This deal came after talks ended in July between Zain and France's Vivendi over the sale of the African assets.
The Millicom comments added to doubts over whether the Kharafi deal would go through and follow an Indian newspaper report on Oct. 26 that quoted BSNL chairman as saying the agreed 2-dinar a share price was expensive.
EFG's Wakeman said ratings agency Moody's downgrade of five Dubai government-linked firms on Wednesday had little effect on stocks.
"(It) will affect their cost of funding but wasn't a factor in the market moves today in my view," he added. Shares in DP World, one of the downgraded companies, were up 2.2 percent at 1250 GMT, although they have fallen 14 percent since Oct. 26.
TRADING HIGHLIGHTS
The Dubai index fell 1.9 percent to 2,098 points.
The Abu Dhabi measure dropped 1 percent to 2,920 points.
The Kuwait index advanced 0.1 percent to 7,334 points.
The Qatar benchmark slipped 0.1 percent to 6,953 points.
The Oman index fell 0.1 percent to 6,333 points.
The Bahrain measure rose 0.1 percent to 1,507 points.
The Egypt benchmark fell 1.6 percent to 6,548 points.