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Posted On: 11 August 2011 07:22 am
Updated On: 12 November 2020 02:11 pm

Gulf stock markets rise after global uptick

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DUBAI STOCK markets in the oil-rich Gulf region recovered on Wednesday as global markets were rejuvenated by the US Federal Reserve pledge to keep interest rates near zero for at least two years. The Dubai Financial Market index closed 1.15 percent up after it had bounced by more than two percent in the first 15 minutes of trading, with leading shares rising after being mostly in the red since the trading week began. DFM closed at 1,460.96 points following a wave of profit-taking sales. The shares of giant Emaar Properties closed 1.45 percent up after surging 2.91 percent in earlier trading. The property developer which built Burj Khalifa, the world’s tallest tower, had seen its shares drop by 2.83 percent on Tuesday. Qatar Exchange, the second largest Arab bourse, also bounced back from the red, closing 0.7 percent up at 8,127.54 points after closing 1.76 percent down on Tuesday. In Abu Dhabi, shares closed 0.96 percent up at 2,602.50 points after opening in the green. All traded sectors were up, with energy shares jumping 2.85 percent and property shares rising 1.54 percent. The financial market of the capital of the United Arab Emirates had closed 1.34 percent down on Tuesday. “Local markets have reacted to the movement in US and European markets,” said Wadah Taha, chief investment officer at Al Zarooni Group in Dubai. He said that the initial surges at opening were “euphoria... which takes place when the reaction is spontaneous after a series of frustrations,” adding that profit-taking sales by foreign investors slowed the pace of recovery. “Foreign investors entered the market late yesterday (Tuesday) and they sold today in quick profittaking transactions,” he said, adding that purchases by foreigners in Dubai and Abu Dhabi on Tuesday amounted to 166 million dirhams ($45.2 million). “There was an expectation that the US Fed will come up with a positive action,” he added. Taha insisted that the fundamentals in Gulf markets were strong and that the deterioration was because of panic that trickled down from global markets. Saudi shares also recovered on Wednesday, with the Tadawul All- Shares Index (TASI) increasing 1.66 percent in the first 15 minutes of trading. It traded 0.84 percent up in the afternoon at 6,059.43 points, after it closed 0.81 percent down on Tuesday. The largest Arab bourse shed 5.46 percent of its value on Saturday after being the first market to feel the impact of Friday’s historic downgrading of the US credit rating by Standard & Poor’s. The Saudi index of petrochemical companies rose by 2.51 percent, with leading SABIC shares recovering by 2.6 percent in morning trading. But the sector reduced gains to 0.49 percent and those of SABIC dropped to 0.78 percent. Muscat Securities Market in Oman also opened positively, increasing 0.87 percent to 5,945.23 points after shedding 2.42 percent of its value on Tuesday. But it closed 0.2 percent down in the red at 5,882.30 points. Kuwait Stock Exchange closed up 0.32 percent at 5,900.8 points. It had opened in the green, trading 0.58 up percent during the day, after closing 1.25 percent down on Tuesday. Asian markets rallied on Wednesday following a bounce by US and European markets late on Tuesday after the US Fed announcement. Those gains came on the heels of a turnaround in Europe, where falls as large as six percent were reversed. London’s FTSE-100 index gained 1.89 percent on Tuesday and in Paris the CAC-40 rose 1.63 percent. In Frankfurt the DAX slipped 0.10 percent. European stocks continued their rally on Wednesday as London’s FTSE-100 jumped as much as 1.8 percent before reducing profits to 1.01 percent up after the Bank of England downgraded its 2011 British economic growth forecast.