UAE, GCC stocks head back into partial recovery
Dubai: The UAE and other GCC stock markets are in partial recovery on Monday from what was the biggest selloff this year, mirroring a similar shift in sentiment seen in global markets.
After steep declines on Sunday, Dubai Financial Market (DFM) index regained 2.54 per cent (64 points) at 2,536.66, while Abu Dhabi Securities Exchange (ADX) rose 0.84 per cent (54 points) at 4,763, each of them clawing back half of its previous-day losses.
In the UAE, blue-chip developer Emaar Properties advanced 3.3 per cent and Dubai Islamic Bank rose 1.5 per cent. Other gainers included budget airliner Air Arabia, which opened 3.9 per cent up.
Gains on the bourse in Abu Dhabi was driven by a 2 per cent gain in First Abu Dhabi Bank and a 3.7 per cent rise in Abu Dhabi Commercial Bank. Both these stocks had posted steep declines on Sunday.
Other GCC markets calm
Apart from the UAE, Saudi Arabia’s benchmark index (TASI) rose 1.8 per cent with Al Rajhi Bank gaining 2.4 per cent and petrochemical maker Saudi Basic Industries increasing 3.8 per cent. Kuwait’s major index, which slumped 11 per cent before trading was suspended on Sunday, is up 6.3 per cent.
However, Qatar’s index, which did not trade on Sunday, opened down 1.4 per cent, with heavyweight Industries Qatar plunging 5.5 per cent.
Saudi Arabia said it had prepared 25 hospitals to handle any coronavirus cases that might be detected in the kingdom, part of precautionary measures which include closing its borders to foreign umrah pilgrims. While the kingdom has not recorded any cases of the new coronavirus so far, Qatar’s health ministry has announced three cases so far.
Easing global sentiments
The recovery in GCC markets came as sentiment started to ease elsewhere. The worst global stock rout since the financial crisis was cushioned by optimism that central banks and government stimulus will help cushion markets from the spreading coronavirus. Crude oil too rebounded and the dollar slipped.
“For the regional markets, trading activity during the coming weeks will be dominated by sentiments in the global markets,” said Iyad Abu Hweij, managing director at Allied Investment Partners.
Elsewhere in Europe, Stoxx 600 index jumped and contracts on the three Wall Street indexes all advanced, and although Asian trading began with further declines in stocks and gains in bonds, they reversed losses after the Bank of Japan followed the Federal Reserve in issuing a statement hinting at easing.
“Going forward, global equity markets will continue to remain under pressure; however, a technical pull back can’t be ruled out in the coming week,” Iyad Abu Hweij added, referring to a potential rebound after a steep selloff as per a technical market analysis.
Market wide sentiment eased after traders awaited policy action following a rare statement from the US Fed opening the door to a rate cut on “evolving risks” posed by the virus.
Following the Fed statement, Aditya Pugalia, director of financial markets research at Emirates NBD, said the odds are increasing that the Fed will cut rates by 25bps at the March 17-18 meeting, while also assuming another move by the Fed around the middle of the year.
Source: Gulf News