Egypt turmoil rattles Middle East stock markets

Investors nervous about the instability gripping Egypt drove stocks down sharply across the Middle East as markets reopened Sunday following a weekend of violent protests.

Dubai, United Arab Emirates:  Investors nervous about the instability gripping Egypt drove stocks down sharply across the Middle East as markets reopened Sunday following a weekend of violent protests.

The losses, led by a drop of more than 4 percent in the business hub of Dubai, reflect concerns the unrest that has roiled the Arab world's most populous country and nearby Tunisia could spread, jeopardizing the economic recovery across the region.

"There's this contagion effect, where investors are thinking: Well, is this going to spread out across the Arab world?" said Haissam Arabi, chief executive of Gulfmena Alternative Investments, a fund management firm in Dubai.

The benchmark index for the Dubai Financial Market tumbled 4.3 percent to close at 1,543.02.

Among the biggest losers in Dubai were real estate developer Emaar Properties, the builder of the world's tallest tower, which sank 8.3 percent to 3.11 dirhams (85 cents). Shares of discount carrier Air Arabia, which is growing its operations in Egypt, dropped 6.1 percent to 0.79 dirhams (22 cents).

Abu Dhabi's main index sank 3.7 percent to close at 2,561.06.

Shares of the exchange's biggest loser, Emirati natural gas producer Dana Gas, plunged 9.9 percent to finish at 0.64 dirhams (17 cents) despite assurances that its Egyptian operations haven't been stopped amid the protests.

"Dana Gas Egypt is continuing with routine operations, and the production has not been affected by the current events in Egypt," CEO Ahmed al-Arbeed said in a statement.

Most other regional markets also fell.

Kuwait shares dropped 1.8 percent to close at 6,822. Qatar's benchmark index slumped 3 percent to 8,709.77.

Saudi Arabia was the only major market to post gains, but they fell short of offsetting steep losses the previous day. The kingdom's Tadawul All Shares Index was up 2.5 percent to 6,425.39 in afternoon trading Sunday.

Saudi shares fell 6.4 percent to close at 6,267 points on Saturday, when it became the first major Arab market to reopen for business following widespread Egyptian protests that intensified Friday.

Bureau Report

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