Gulf markets up as Asia rallies
The Gulf markets showed signs of recovery this morning after days of heavy losses amid speculation of a US recession.
At 11am, the benchmark indices of The Dubai Financial Market and the ADSM had posted gains of 6.5 and 4.95 per cent respectively. These figures quickly gained further momentum half hour later with Dubai index jumping at 8.75 per cent and Abu Dhabi at 3.77 per cent.
By Wednesday afternoon, trading at the DFM have remained on an uphill climb with traded volumes at 5,735.19, soaring by 10.07 per cent as of 12:44 pm.
At the ADSM, market index is also relatively higher at 4.02 per cent.
Dubai's Emaar Properties, which saw considerable losses yesterday, posted gains of more than 7 per cent. The Dubai Financial Market Co surged by 14.38 per cent.
Yesterday, the two UAE markets endured their largest one-day declines since 2006, with losses of over 6 per cent.
One Dubai-based stock trader said that, although the gains are encouraging, the UAE markets could take some time to make a full recovery.
“Bumps are expected along the way. It will take some time for the markets to rebound to the level they were previously at, but the UAE economy is doing well. We may see the markets moving sideways for a while,” says Amro Diab, Trader at EFG-Hermes.
Diab said what happened on Tuesday to the UAE stocks was driven by negative market sentiment. “We’re not co-related with the US but because of the negative sentiment that generated in the global market, our indices were also pulled down,” he explained.
“However, the UAE companies have grown out of their operations and are already stable. They have attractive values for long-term investment,” he said.
Stock markets across the Gulf also showed signs of recovery in early trading. Oman’s benchmark rose by 2.83 per cent, slightly recouping its 8.33 per cent loss on Tuesday. Its index also crossed the 9,000-point mark, driven by Oman Telecommunications Co, which surged by more than 6 per cent.
Qatar’s main index is steadily moving upward at 1.95 per cent in a bid to regain its 7.76 per cent loss the previous day.
The general index in Bahrain is also starting to inch up at 1.41 per cent, according to the Bahrain Stock Market’s official website.
Asian shares also rallied today after the US Federal Reserve Board cut its interest rate. But nagging fears of a US recession prompted many Asian indices to give up much of their early gains, according to a Reuters report.
In Tokyo, the Nikkei was up 1.4 per cent; Australia’s benchmark S&P/ASX 200 index was up 5.3 per cent; and the Hang Seng index in Hong Kong also jumped by 5.3 per cent.
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