The UAE stock markets added a combined 195 points yesterday to enjoy their largest one-day gains since mid-April and further increases are expected today.
The upbeat forecast comes after the Dubai Financial Market climbed 1.77 per cent to 5,540 points, while the Abu Dhabi Securities Exchange reached 5,044 following a 1.81 per cent rise.
Both indices broke through minor resistance levels and buying should continue today, but trading will be tougher tomorrow as investors take profits.
Brokerages have opened new margin positions at the start of the month and this extra liquidity helped the DFM's turnover to more than double from the day before. Cash was pumped into penny stocks and blue chips to help the likes of DFM Company, Air Arabia and Amlak Finance make their largest gains in 10 weeks.
The capital's slumbering giants also awoke, with etisalat and Abu Dhabi Commercial Bank closing in the green, while First Gulf Bank stole the show with a 4.5 per cent rise. Optimism has returned, at least for now, as investors focus on the imminent release of second quarter results, rather than the ongoing geopolitical tensions that sent shivers through the market and prompted a flight to cash.
Overall, gainers were outnumbered 52:15 and technical analysts tip DFM Company, Rak Properties, Aldar Properties and Gulf Navigation to be among the star performers today, while speculators will focus on the hyperbolic Methaq, Arkan and Aabar.