Sudden heavy buying by local investors propelled the Dubai Financial Market to its largest one-day gain in six months.
The DFM's General Index surged 3.02 per cent to 5,457 points, its best close since July 3, while Abu Dhabi increased 0.7 per cent to 4,985 points.
Analysts had long warned the DFM would remain in the doldrums until its blue chips claimed large daily volumes and these predictions were proved correct yesterday as more than Dh2 billion of shares changed hands, with much of this concentrated in Dubai's once-moribund heavyweights.
Emaar and DFM were the gainers, jumping 5.5 per cent and 6.4 per cent respectively, much to the delight of beleaguered brokers.
The DFM lost 5.7 per cent between July 1 and 17 and more losses were expected as trading slumped to a two-month low, but positive international developments spurred investors to snap up some bargains. "We've seen a good pick-up in Asian markets and a retreat in oil, while the European markets are looking good and the US is doing OK," said Julian Bruce, EFG-Hermes director of institutional equity sales.
"Local investors have been following the global picture and they saw these positive developments and decided to start accumulating in the blue chips."
With regional and global problems seemingly easing, investors are finally reacting to the generally excellent second-quarter results.
"All earnings have met or beaten forecasts, while the market has suffered a harsh drop over the past month mainly as a contagion from international markets, but also because of regional turmoil," said Ahmad Shahin, Shuaa Capital equities strategist. "These tensions have diminished and with more firms announcing excellent results we expect the rally to continue for the time being, although it will take a few more days to confirm we are in an uptrend."