The absence of major triggers is expected to keep trading on the UAE's bourses range-bound this week, according to analysts.
Only major factors, such as a sharp movement in oil prices, will be able to impact trading in the markets, which will otherwise move in a narrow sideways range.
"I guess it depends upon global cues. If oil prices go up, then the market is likely to move upwards," Nour Al Zoubi, General Manager at MAC Sharaf Securities, told Emirates Business.
Turnover on both the Dubai Financial Market (DFM) and the Abu Dhabi Securities exchange (ADX) eased this week.
It had been observed that turnover was narrowing down as buying interest among investors eased. The DFM saw an average trading value of above Dh1 billion.
Hussam El Husseini, head of brokerage at Emaar Financial Services, said: "We will see range trading as there is not much activity in the market. Moving in a narrow range of sideways trading, the markets are likely to maintain previous levels."
The dwindling trading value is a clear indication of lacklustre trading in the near future, as the turnover is very important to keep up the upward movement on the bourses.
Wadah Al Taha, a senior market analyst, said: "Next week, the markets are likely to move in a cautious way and trading will be in a limited range. As no clear motivation is seen, there will hardly be any deals for positions to build up. Psychologically, the market is waiting for the second quarter results."
The DFM general index lost 4.98 per cent in June after a good recovery in May, in which banks, companies and institutions extended buying support that took the index up 16.97 per cent.
Most of the institutions turned out to be sellers later, pushing the markets into pressure. "Many funds were exposed to the banking and real estate sectors. Clear separation was witnessed last week, which sets a new direction for the market. If this continues, at first fundamentally strong companies will get good buying support, and then speculators will enter the market. This will result in a phase of volatility.
"Until then, trading values will be in a limited range only as individual investors and institutions await the second quarter results," said Al Taha.
Going by the prevailing behaviour, institutions are in a wait-and-watch mode, and are busy with revising their portfolios.
"After selling for two weeks, there's a possibility of restructuring big portfolios, which is highly required in the present context," added Al Taha.
Sanyalaksna Manibhandu, Research Head at Emaar Financial Services, said: "The trading value is likely to come down in July and August as the market goes into the holiday season. From the third quarter onwards, the focus is likely to be on small and mid-cap stocks. As a result, turnover will come down from its present levels."
All major developments in the corporate sector, such as consolidations like the Shuaa-Dubai Banking Group (DBG), Emaar-Saudi Holding and Emaar-Dubai Holding, have been factored in.
Low volumes in the markets indicate there were no major moves in the industry or economy that could boost trading. The last trading session of the previous week saw low volumes on both the UAE markets.
On Thursday, the DFM recorded Dh560 million and the ADX Dh253m.
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