Markets await strong movers to rebound

UAE stock markets are projected to test their support levels before they can rebound amid declining volatility and turnover. However, the markets reached oversold areas and can witness good upside movements from today.

The lack of strong movers is expected to dominate the market sentiment as investors are waiting for the first quarter results while the season of cash dividends and bonus shares distribution is nearing its end.

The Dubai Financial Market (DFM) index is approaching its important support level of around 1750 points and is expected to test it early this week before it can rebound. "Later this week, we expect the DFM may be able to rebound and retest its resistance area around 1825 points," said Ahmed Hetta, Head of Research at Tadawul Shares and Bond Mediation.

Abu Dhabi Securities Exchange (ADX) is also expected to continue its sideways trend amid calm trading this week as the index came near its support area around 2800 points.

If a cue is taken from the Saudi market, the UAE markets should witness some buoyancy this week. Saudi shares climbed to an 18-month high yesterday led by petrochemicals companies.

Saudi Arabia's Tadawul All Share Index increased 1.4 per cent to 6868.83 points, the highest since September 28, 2008.

Stock markets witnessed bearish movements last week which dragged indexes near their support levels. The markets need strong movers, mainly positive surprises in Q1 results, to rebound.

Distribution of cash dividends and bonus shares played a major role in the bearish trend as the markets were pricing in cash dividends and additional shares.

The investors created more pressure by selling their bonus shares in the markets to cash their profits.

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