Dubai drops as fresh virus spike in other nations stokes recovery fears

Dubai shares hit a four-week low on Wednesday, as a resurgence in COVID-19 cases in other countries across the world threatened economic recovery in the tourism-reliant market.

Dubai's main index fell for a third consecutive session to end 0.6% lower, its lowest closing since June 1, with Emirates NBD Bank dropping 1.1%, while Sharia-compliant lender Dubai Islamic Bank declined 0.8%.

"Dubai's hard-fought position as a global and regional hub is being monitored in the context of rapidly spreading delta variant, shortly after the local government announced eased restrictions," Kaia Parv, head of investment research at FXPrimus.

On the other hand, Abu Dhabi's main index advanced 1.1% to hit a record high, buoyed by a 2% rise in the country's largest lender First Abu Dhabi Bank, followed by conglomerate International Holding (IHC) jumping 3.5%.

IHC has risen 24% so far this week after the listing of Alpha Dhabi Holding, in which IHC holds a 45% stake.

Saudi Arabia's benchmark index touched its highest level since September 2014, before closing 0.1% lower. Buoyant oil prices allowed the index to post its sixth monthly gain in a row for year-to-date gains of over 26%.

Oil giant Saudi Aramco and Saudi National Bank led losses with falls of 0.6% and 0.7%, respectively.

The Qatari benchmark slipped 0.2%, hit by a 0.7% fall in the Gulf's biggest lender Qatar National Bank.

Negative sentiment still grips the Gulf markets as traders continue closing their positions, Parv said, adding that the pullback has become more pronounced as the week advances with investors choosing to take profits from these levels.

"Prices had become extended based on technical indicators, and a correction had been due for some time."

Outside the Gulf, Egypt's blue-chip index bounced back 1.3% from a 1.5% decline a day earlier following a sell-off in blue-chip stocks, led by gains in Commercial International Bank, which was up 3.3%.