DUBAI: Abu Dhabi's shares slumped to a fresh 30-month low, while trading was muted in most Gulf markets as investors waited for cues from European Union leaders' summit that kicked off late Sunday.
Volumes in UAE's capital fell to their lowest in over two years as investors remain cautious of global uncertainty with thin local fundamentals exacerbating the situation.
"Uncertainty is prevailing over, and hesitance on both sides (buying and selling) is peaking," said Talal Touqan, head of equity research in Al Ramz Securities. "Psychologically, such periods usually precede a sudden burst of high volatility." The index slipped 0.09 percent to its lowest close since April 2009.
Etisalat was the main drag, slipping 0.1 percent. National Bank of Umm Al Quwain and Union National Bank fell 2.2 and 0.3 percent respectively. Dubai's index ended 0.2 percent lower at 1,364 points, a point away from Wednesday's seven-month low.
"Support levels and acceptable valuations ratios are not protecting the prices. Traders are losing faith," Touqan added. In Qatar, the index climbed 0.8 percent, trimming its 2011 losses to 2.9 percent.
United Development jumped 10 percent after reporting a 75.4 percent-rise in nine-month net profit of 1.8 billion riyals, according to a bourse statement.
Its earnings per share jumped from 2.8 riyals to 11.3 riyals in the same period.
"The new evaluation of the company's assets caused the earnings per share to jump, (from 2.8 riyals to 11.3 riyals for the nine-month period)," said Eyad Al Saqqa, account manager at Dlala Holding in Doha.
Other developers may see a similar re-evaluation, especially Barwa Real Estate, which had bought land at cost price from the government, he added. Barwa gained 1.4 percent.
Banks also rose, a reflection of strong quarterly earnings, analysts said. Qatar National Bank gained 2.2 percent and Commercial Bank of Qatar climbed 0.6 percent.
"(Qatar's) earnings have been excellent so far which has in turn reflected on the market," said Houssam Saafan, training department manager at The Group brokerage. "Banks is still the best sector. It has great fundamentals and Q3 results were outstanding. We might be looking at a better Q4 and an overall good year." In Kuwait, a late rally lifted the index 0.2 percent.
Developer Mabanee CO. gained 3.5 percent and First Investment soared 9.3 percent. "Small-cap stocks with good fundamentals are now getting popular for short term and long-term investment," said Fahad al-Sheraian, general manager at Union Securities Brokerage Company.
Meanwhile, Saudi Arabia's index rose in a late-day rally as investors pick up domestic-driven stocks. Al Ahli Takaful and Saudi Fisheries jumped 7.5 and 9.8 percent each.
"Leading stocks are not getting as much liquidity as before," said Tarek al-Madi, an independent Riyadh-based financial analyst, with small-cap stocks' third-quarter earnings attracting traders.
The index climbed 0.5 percent, trading in a tight-range since early August with a ceiling of 6,120 points and a floor of 6,044 points.
EU leaders piled pressure on Italy on Sunday to speed up economic reforms to avoid a Greece-style meltdown as they began a crucial two-leg summit called to rescue the euro zone from a deepening sovereign debt crisis.
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