Abu Dhabi stocks struggled to take off from a two-year low yesterday as large-cap companies slumped, following the UAE and Qatar's failure to secure an upgrade to "emerging-market" status from MSCI.
Much of the money that had entered the market to speculate on an MSCI upgrade was now withdrawing, said Fadi Al Said, the head of investments at ING Investment Management.
"For us it's not a game-changer," he said. "But what we see is some money - the disappointed money - is still leaving the market."
In the meantime, investors were left searching for catalysts to reignite local markets, Mr Al Said said.
Dubai's market rose tentatively from Thursday's lows after the index provider's announcement.
The Dubai Financial Market General Index rose 0.3 per cent to 1,372.24, while the Abu Dhabi Securities Exchange General Index was flat at 2,412.22.
Gains for shares including Mashreq, Arabtec, du and Air Arabia kept Dubai's index in positive territory, even though most of the emirate's stocks fell.
After fresh warnings from Fitch Ratings on Friday that France's "AAA" credit rating could face a downgrade, many investors are leaving cash on the sidelines.
Shares in Emaar Properties, the largest component of Dubai's index, fell 1.1 per cent to Dh2.62 each.
Elsewhere in the Gulf, Oman's markets fell while stocks in Saudi Arabia and Kuwait made gains. Markets in Bahrain and Qatar were closed for national day celebrations.
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