Abu Dhabi market ends flat amid mixed trading
After a continuous fall for two sessions the Abu Dhabi Securities Exchange (ADX) recovered yesterday, with its general index showing a marginal gain of 3.13 points, or 0.11 per cent, to end the day at 2862.87 points.
With a mixed trading trend, the ADX recovered on speculative buying support in select stocks, as 15 major stocks declined and 17 made gains.
"A drop in oil prices and continuous declines on the bourse were the major reasons impacting trading. The market is likely to move sideways as investors await second quarter results. Both retail and foreign investors have entered at low prices and may sell off to book profits," Majdi Mansour, a senior financial analyst, told Emirates Business.
Crude oil prices eased to $70 per barrel in the global markets yesterday. Global stock markets turned weaker as investors wait for the US inventory report, which is expected to show declined supplies.
Mathew Wakeman, Managing Director for Cash and Equity-linked Trading at EFG Hermes, said: "Oil has a key part to play here and hopefully volatility in the dollar may keep oil above the $70-level, as the tail continues to wag the dog in the oil price-dollar relationship."
Yesterday, RAK Properties was volatile on the ADX on speculative transactions, and accounted for two-thirds of trading volume. The stock gained in early trade and later came under selling pressure to fall 2.17 per cent.
Aldar declined and Abu Dhabi Commercial Bank (ADCB) also slid, while Arkan Building Materials' stocks went up 1.85 per cent.
Speculators are targeting the penny stocks to take them above one dirham and to book quick profits. This speculative buying is driving the prices of stocks higher without any fundamental reasons.
Shiv Prakash, technical analyst at MAC Capital, said: "The Abu Dhabi market remained flat and closed marginally higher by 0.11 per cent at 2862.87 with most stocks trading flat. There was not much interest seen on the trading side and volumes were also low, with only 282.5 million shares traded for the day."
The day's turnover was Dh439 million, with the 282.5 million shares traded in 4,354 deals in 39 scrips. Only six stocks remained unchanged in their values.
"If the market remains below the pivot of 2866 points, we could see it falling until the 2846 support level, where some buying is expected. A breakout above 2866 points will lead us higher, towards 2886," said Shiv Prakash.
GCC under pressure
Five GCC bourses closed lower yesterday following profit booking and the drop in oil prices.
Led by the Saudi Arabian market – where the barometer Tadawul index shed 1.19 per cent – the DFM, Cairo and Amman bourses all closed in the red, while the ADX, Kuwaiti, Muscat and Bahraini bourses closed higher.
The Doha bourse recorded the maximum losses of 4.51 per cent, followed by the DFM, which shed 2.76 per cent.
Among the gainers, only the Bahraini stock exchange gained more than a per cent, ending 1.69 per cent up.
Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here.