The Abu Dhabi Securities Exchange halted a three-day decline yesterday, despite trading falling by almost a quarter.
The ADX surged 2.44 per cent to 2,189 points following surprise gains in the real estate sector.
Sorouh Real Estate jumped 7.6 per cent to Dh2.60, while Aldar Properties arrested a 10-session slump to climb 2.1 per cent to Dh2.48. Etisalat also bounced back, rising 2.7 per cent to Dh9.94.
"Arabtec's news [which the saw construction giant lose a $1.3bn (Dh4.7bn) joint contract to build Dubai's Meydan racecourse] was a big drag on Dubai's real estate sector and this spilled over into Abu Dhabi last week," said Julian Bruce, EFG-Hermes director of institutional equity sales. "There's a long-term perception that Abu Dhabi is a safer haven than Dubai, but we have seen increased selling by foreign investors in the capital's widely held stocks."
Etisalat and Sorouh are likely to come under pressure today, with the prices mentioned above the average from yesterday's trading as both saw markedly lower last traded prices.
For example, etisalat's final trade was at Dh9.68, some 2.6 per cent below the closing average, while Sorouh's was 7.1 per cent lower, which means that yesterday's official gains were largely wiped out by the end of the session.
It was similar story for many of Abu Dhabi's major gainers, with late selling undermining a superficially impressive performance. First Gulf Bank surged 6.8 per cent to Dh7.40, while Abu Dhabi Commercial Bank and National Bank of Abu Dhabi both added more than three per cent.
"This means we will see the ADX open down today," said Bruce. "It's too early to confirm any significant rebound, but it appears the continuous selling the market has suffered is declining."
Meanwhile, oil prices appear to at last be stablising, which should boost investor sentiment, even if it has little real effect on stock prices.
"The link is pretty weak, but crude's tumble is a concern on the macro level, with our economists calculating the break-even price is $37 a barrel," said Bruce.
"Dubai is only correlated to oil on the downside, it doesn't have much of a role in any potential upside, with investors much more focused on the performance of the banking and real estate sectors.
"If oil has a bounce it's positive for the UAE economy, but this wouldn't remove the underlying concerns from the bottom up about the companies themselves."
Turnover fell to Dh156 million, which is down by a fifth on this year's average of Dh192m.
Aldar was again top trader after seeing Dh73m of shares change hands, but the largely dormant Rak Bank earned second place after seeing Dh18m shares offloaded. The lender fell 0.25 per cent to Dh4.04.
DP World closes flat
DP World closed flat on a subdued day's trading on the Nasdaq Dubai.
The ports operator ended on $0.25 – a record low - after seeing 319,000 shares change hands.
Depa is in similar trouble as the interiors contractor fell 6.67 per cent to $0.42, which is just above October's all time worst finish of $0.40. No other stocks were active.
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