6.15 PM Wednesday, 4 October 2023
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:55 06:09 12:10 15:32 18:06 19:20
04 October 2023

Dubai stocks may extend gains despite oil's pull-back

Gulf equities are expected to open on a positive note today – thanks to recovery in crude prices. (File)

By Reuters

Positive momentum may support stock markets in Saudi Arabia and Dubai on Monday despite oil's pull-back, after both markets surged on rising trading volumes in the previous session.

Brent crude fell 2.6 percent to $51.59 on Monday after US unions called a refinery strike and traders cashed in on strong price gains last week, when the market soared in response to a sharp drop in US drilling.

The oil price jumped 8 percent last Friday, helping indexes in Saudi Arabia and Dubai gain 3.0 and 4.5 percent respectively on Sunday.

But apart from oil, a major factor behind the equity rallies was Saudi King Salman's order last Thursday to pay two months of bonus salary to all state employees and pension to retired government workers. This has eased fears of slower economic growth due to cheap oil and fanned hopes that Saudi Arabia' consumer boom will continue this year.

Technicals are also positive: the Saudi stock index, which closed Sunday at 9,144 points, broke above resistance on the late December peak at 8,948 points. It faces the next barrier on the 100-day average, now at 9,436 points.

Dubai closed at 3,840 points and faces resistance at 3,960 points, the January peak. Gulf investors were net buyers in the market on Sunday, indicating that some money may be flowing into Dubai from Saudi Arabia.

There have been no recent earnings reports from major companies listed in those markets, but rating agency Moody's said in a report on Monday that Dubai World's second debt restructuring was credit-positive for the UAE banking system and Emirates NBD in particular.

Dubai developer Damac is due to report its fourth-quarter results later on Monday.

Elsewhere in the region, Zain Group, Kuwait's biggest telecommunications operator by subscribers, may come under pressure after it reported a 35 percent drop in fourth-quarter profit on Sunday.

Zain made 33 million dinars ($112.2 million) in the quarter. Two analysts polled by Reuters had forecast it would earn between 48.3 million dinars and 53.7 million dinars.

On global markets, Asian shares slipped on Monday after disappointing economic data from China.