Dubai: The Dubai index led the sell off in the Gulf region after Brent crude neared the keenly-watched $50 a barrel mark.

The Dubai Financial Market General Index ended down 3.24 per cent at 3,450, after losing more than 5 per cent in the previous two sessions.

“Dubai also went down because other markets in Asia opened weaker. Crude prices went down on Monday, and they were up in the morning and went back down again, so investors saw no need to buy back today,” Sanyalaksna Manibhandu, manager of research, NBAD Securities told Gulf News.

Oil slumped almost 50 per cent in 2014, the most since the 2008 financial crisis, after the Organisation of Petroleum Exporting Countries resisted calls to cut output as it competes with US producers.

Emaar Properties, which was the most active stock in trade, fell 5.80 per cent to be at Dh6.50.

Emaar may test a new low of Dh5.57 if it breaches support area of Dh6.18, said Osama Al Ashri, member of British organisation, Society of Technical Analysts. Arabtec may lead the index to new low, and may test a low of below Dh2. Arabtec ended the trade at 4.78 per cent lower at Dh2.59.

Dubai Islamic Bank, which ended at Dh6.16 in trade on Tuesday, may test support area of Dh5.6.

In the wider market, out of a total of 34 shares traded on the DFM, shares of 24 companies fell.

Elsewhere on Abu Dhabi Securities Exchange, the general index fell 2.66 per cent lower at 4,329.61. In stock specific movements, First Gulf Bank ended at Dh16.1, down more than 4 per cent, while Aldar Properties ended at Dh2.3. First Gulf Bank may test support area of Dh15.30. Aldar Properties may test support area of Dh2.07, Al Ashri said.

Sign of stability:

“When crude fell $60 per barrel, markets reacted much worse then, Today WTI crude fell below $50, markets fell much less. Its an early sign of stability creeping back in,” said Manibhandu.

The Dubai index witnessed its biggest one day loss last month as tumbling crude triggered massive sell off across the counters.

“There are more factors involved here not just crude, but also leverages,” said Manibhandu.

The capital markets regulator asked stock brokers to sell off shares in the account of the trader is unable to replenish the shortfall in margin within two days, and reiterated that short selling of securities were not allowed.

The central bank board also upped the ante by asking banks to study about margin lending by banks.