DFM seems to test new support level

Dubai Financial Market (DFM) began the week on Sunday dipping below the psychological 1500-mark, after 11 days, shedding 24.18 points or 1.59 per cent to close at 1,493.60, with selling pressure across all sectors, except materials, pushed the market down. The last time DFM General Index (DFMGI) went below 1500 was on July 27 when the index closed at 1498.78. All sectors led by real estate, banking, financial, insurance, transportation, telecom, and utilities pulled the index below. Material sector was the sole sector ending in green by 1.96 per cent. Gainers included Takaful Emarat, National Cement Company, IFA, Gulf Navigation, DP World, and Al Salam Bank Sudan. Volume stood at around 54 million, more than the last day of trading on Thursday last week. The market breadth was negative with 5 advances against 22 declines. “There is no specific fundamental factor pushing the market down. Rather, the sentiment is being driven more by technical factors,” Waleed Al Khateeb, Chief Financial Officer, Daman Investments said. He said investors are still pessimistic about the overall economy and therefore are not anticipating encouraging corporate results, which is being reflected in the market performance. That is also the reason why there has been low volume in the market almost every day, he added. Abu Dhabi Securities Exchange (ADX) also lost 2.57 points to close at 2,526.83. He said considering the technical factors, the market has been trying to have a flat and sustainable trading for the last one month. However, due to lack of confidence and liquidity in the market, shares couldn't sustain flat trading and pressure built up on the market triggering a fall as we saw today. “Today we saw a few blue chip shares falling sharply on the DFM. However, one positive factor in today's trading was that the volume was higher than the average for the last one month. However, on the other hand higher volume was also negative because it came on the down side market,” Al Khateeb said. “Going forward, we don't see a high volume and a high price trajectory on the DFM as well as on ADX in the short term. We expect the month of Ramadan will spur an accumulation mood, as investors would start to consolidate their positions during the month to prepare for a possible short rally after Ramadan, as it's a regular yearly feature,” he said.