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Abu Dhabi, Dubai Stocks Slide as Middle East Tensions Escalate

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Shares in the United Arab Emirates closed lower as tensions flared in the Middle East, prompting investors to take a cautious approach.

At the close of Thursday trading, the FTSE ADX General Index declined 0.326%, while the DFM General Index lost 0.418%.

Dominating headlines all over the world are the continued exchange of attacks between the US and Iran on Thursday, threatening their ceasefire agreement signed in April. Further dampening sentiment were US President Donald Trump's social media comments that Iran took too long to negotiate a deal and will now have to "pay the price."

"President Trump threatened Iran that more strikes will follow if it doesn't agree to a deal; Iran said the Strait of Hormuz will be closed until further notice. While that isn't something Iran can officially do, it can make vessel crossings a lot more difficult. This leaves shipowners reluctant to navigate the key chokepoint. It once again suggests a deal is still some way off and that energy flows from the Persian Gulf will remain heavily constrained," ING analysts said.

Reuters reported Thursday, citing three Iranian and a European source, that both countries exchanged messages on a memorandum, with issues like the release of frozen funds to Iran still needing to be discussed in detail.

Back at home and on the corporate side, Two Point Zero Group (ADX:2POINTZERO) sold its entire 7.29% stake in Abu Dhabi National Energy Co. (ADX:TAQA), d/b/a Taqa, to L'imad Holding's unit Abu Dhabi Power Corp. Shares of Two Point Zero Group closed 1.36% in the red, while those of Taqa ended the session 3.38% lower.

Over in Dubai, stocks of Commercial Bank of Dubai (DFM:CBD) shed 0.22%. The Emirati lender partnered with Dubai Holding Real Estate to launch a new home financing program for local salaried and self-employed individuals looking to buy properties across Nakheel, Meraas, and Dubai Properties.

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