Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
UAE stock markets stayed muted on Wednesday as the global sell-off in chip and semiconductor stocks raised fears of an “AI bubble”.
The ADX General Index (FADGI) fell 0.312% to close at 9,993.42. Trading activity remained strong, with 27,838 trades involving 402 million shares valued at Dh1.77 billion. The total market capitalisation of ADX-listed stocks stood at Dh2.924 trillion. In a single bulk transaction, ADNOC Distribution shares worth Dh440 million were sold at a price of Dh3.86.
Most blue-chip stocks traded lower amid uncertainty in the global technology sector. Among banking stocks, First Abu Dhabi Bank dropped 1.77%, while Abu Dhabi Commercial Bank fell 0.79%. Abu Dhabi Islamic Bank lost 0.56%.
ADNOC-linked stocks reported a mixed performance. ADNOC Logistics and Services was up 0.68%, while ADNOC Gas fell 0.87%. ADNOC Drilling dropped 0.67%, while ADNOC Distribution slipped 0.25%. Borouge rose 0.39%, while Fertiglobe advanced 0.36%.
Holding company Alpha Dhabi advanced 1.75%, making it one of the few blue chips to report a strong positive performance. Another holding company, 2PointZero, stayed flat at Dh2.27.
Americana Restaurants, the operator of several restaurant brands including Pizza Hut and KFC, rose 1.98%.
Realty giant Aldar dropped 0.92% for the second day, after what appeared to be a recovery from recent lows.
In Dubai, the Dubai Financial Market General Index (DFMGI) fell 0.116% to close at 6,112.04. The session recorded 15,096 trades, with 235 million shares changing hands for a total value of Dh740 million. Market breadth remained positive, with 24 gainers, 19 decliners and seven stocks unchanged.
Real estate heavyweights Emaar and Emaar Development led the market fall, with the former losing 0.32% and the latter dropping 1.93%.
Emirates NBD lost 0.07% and Dubai Islamic Bank dropped 1.04%, adding to the downward trend.
Road toll operator Salik was the star performer, rising 3.45%. Electricity and water utility DEWA rose 1.75%, generating some positive momentum in the market on a day when major real estate and banking stocks lagged. Free zone operator TECOM rose 2.27%, while food delivery app Talabat added 0.81%.
Commenting on Wednesday’s trading in the UAE stock markets, Milad Azar, Market Analyst at XTB MENA, said: “The UAE markets remained relatively resilient despite renewed pressure from the global technology sector. The sell-off in semiconductor and AI-related stocks appears driven more by valuation concerns than a deterioration in fundamentals, which helped limit losses in Abu Dhabi and Dubai.”
Strong trading volumes and selective buying in defensive sectors such as utilities, logistics and consumer names suggest investors are rotating capital rather than exiting the market altogether, Azar said.
“While banking and real estate stocks weighed on the indices, gains in Alpha Dhabi, Salik, DEWA, Americana and ADNOC Logistics highlighted continued confidence in domestically driven growth stories,” Azar said.
The large ADNOC Distribution block trade also reflects sustained institutional activity, Azar added.
“If concerns surrounding the AI sector stabilise globally, UAE markets could benefit from their relatively attractive valuations, strong liquidity, and limited direct exposure to technology-driven volatility,” Azar said.
Commenting on the market’s performance in recent weeks, Nagham Hassan, Market Analyst at eToro, said: “UAE markets have essentially been trading the headlines since the conflict began. However, the speed and scale of the recent rallies demonstrate that genuine investor appetite remains firmly in place. The recovery we've seen is meaningful, but both indices still have ground to recover before returning to their pre-conflict levels.”
The DFM surpassed the Dh1 trillion market capitalisation milestone last week, marking a significant achievement after experiencing substantial outflows earlier, Hassan said.
“Despite ongoing geopolitical uncertainty, underlying market fundamentals remain supportive,” Hassan added.
