DUBAI: United Arab Emirates bourses suffered their largest declines since early November yesterday as most other Middle East markets also retreated, tracking end-of-week losses on global exchanges.

The dollar has strengthened, indicating waning risk appetite, with investors keen to protect gains ahead of the year end.

Dubai’s index fell 2.6 percent as volumes slumped to a three-month low, Abu Dhabi lost 2 percent and Oman and Qatar also declined.

Kuwait rose for a second straight session, trimming its losses since the end of September to 13 percent, and Saudi Arabia edged higher.

“Middle East equities are reflecting the stronger dollar, which implies that investors are taking risk off the table and this will probably continue until year-end,” said Robert McKinnon, Al Mal Capital managing director.

“We should see a sell off in equities, a rise in the dollar and maybe weaker pricing in commodities — people want to book gains.”

UAE property stocks were hammered amid dampened expectations for the sector. Emaar Properties plunged 4.4 percent — its biggest one-day drop since November 3 — Deyaar lost 2.8 percent and Arabtec tumbled 3.5 percent.

“Property sector earnings have been lacklustre,” said McKinnon. “People were hoping for an upside surprise in earnings and they didn’t get it, so they are starting to realise that Dubai real estate is not going to have a v-shaped recovery.

“People were too optimistic and this got priced in, but they are now readjusting expectations and this is bringing valuations down.”

Abu Dhabi’s Aldar Properties and Sorouh Real Estate also tumbled, each falling more than 4 percent.

Mobile telephone and banking stocks helped Kuwait’s index end higher for a second session. Kuwait Finance House climbed 3.9 percent and National Bank of Kuwait (NBK) 3.8 percent.

“There’s no news from the banking sector, but after the recent correction prices were at very low levels so buyers have come in,” said Abdul-Muhsen Al Bahar, head of local and Gulf investments at Noor Financial Investment Co in Kuwait.

Kuwait Finance House is up 11 percent since hitting a 37-week intraday low on Wednesday, while NBK has gained 13.4 percent over the same period, having slumped to a similar milestone.

Mobile telephone firm Zain rose 1 percent to 0.970 dinars, although it is down 29 percent over the past month as investors grow impatient for firm news on its protracted takeover by an Asian consortium first announced in early September. This priced Zain at 2 dinars a share.

“People were sitting on Zain’s stock in expectation of its takeover going through, but the market is now pricing in that the takeover is less likely, especially at valuations that were talked about,” said Al Mal’s McKinnon.

A late banking sector rally enabled Saudi Arabia’s index to rise 0.2 percent although volumes hit an 11-week low.

“The Saudi Market is stuck in a bit of a rut at the moment,” says Fouad Dajani, vice president at Credit Suisse Saudi Arabia.

“There are no local catalysts and uncertainty over the short term direction of global markets persists. Consequently, with the 10-day Eid (Al Adha) holiday coming up, you have a lot of liquidity sitting on the sidelines right now.

“The market has therefore been left at the mercy of day traders, who as the name suggests, are not willing to deploy significant capital for a prolonged period of time.”

Bahrain’s measure rose for a second day, climbing 0.5 percent to 1,450 points, its largest gain for a month.

HIGHLIGHTS

SAUDI ARABIA

The index rose 0.2 percent to 6,284 points.

KUWAIT

The measure climbed 1 percent to 6,822 points.

DUBAI

The index fell 2.6 percent to 2,074 points.

ABU DHABI

The measure dropped 2 percent to 2,865 points.

QATAR

The index fell 0.1 percent to 7,174 points.

OMAN

The measure slipped 0.04 percent to 6,383 points. Volumes slumped to their lowest level since late January.

BAHRAIN

The index rose 0.5 percent to 1,449 points.