Dubai and Abu Dhabi markets pessimistic after IMF warning

World markets tumble after a warning from the IMF that inaction from policymakers could force European banks to sell $4.8 trillion in assets next year.

Markets around the world tumbled as the IMF warned that European banks may need to sell between $2.8 and $4.5 trillion in assets next year if the global financial crisis worsens, and investors approached Q3 earnings season in a pessimistic mood.

Gulf markets tumbled in early trading, taking their cue from Asian bourses.

The Dubai Financial Market General Index fell 0.4 per cent to 1,621.55, while the Abu Dhabi Securities Exchange General Index was flat at 2,650.55.

Other Gulf markets also fell.

In Dubai, Aramex, Emirates NBD and Arabtec Holding led the declines.

Asian markets fell as concerns over Chinese economic growth lingered, with the Nikkei 225 falling 1.9 per cent to 8,590.00 and the Hang Seng Index down 0.2 per cent at 20,876.94

Oil prices slid, with Brent crude futures falling 42 cents to $114.45 per barrel.

European equity futures also fell, pointing to a lower start to the trading day there.