Real Estate and construction stocks in the Dubai Financial Market (DFM) bounced up significantly yesterday and helped the index add 38.74 points, or 2.25 per cent, to close at 1759.60 points, despite an overall low turnover.
The index managed to rally, even at very small turnover, with 219.6 million shares worth Dh300.8 million changing hands during the session. This was the lowest trade volume in six weeks.
The market opened with a gap up and fluctuated sharply during the first half of the session before it rallied during the second half. Though selling pressures ensued from the beginning of the session, some buying was seen at the end, which pushed the index higher during the last few minutes.
Realty and construction stocks rallied yesterday and dominated transactions with bellwether Emaar adding 4.44 per cent to close at Dh2.59. Arabtec, Deyaar and Union Properties also advanced by 5.12, 5.71 and 3.45 per cent respectively.
DSI also added 2.33 per cent to close at Dh0.88, after the company announced it had bought back two million of its shares on Monday in the range of Dh0.86-0.87. The company bought back a total of 14.58 million shares after getting approval from the Emirates Securities and Commodities Authority.
There was a bounce across the board yesterday; 23 stocks advanced, one declined and one remained unchanged. Du was the only stock that retreated, declining slightly to close at Dh2.58.
Analysts were cautious about the current bounce on the DFM due to the sharp decline in turnover, as investors stayed on the sidelines waiting for clearer indicators about the trend in the market.
However, they considered the ability of the index to remain above its support level of 1720 as a good indicator that the market may rebound if there are strong global and local indicators.
Vyas Jayabhanu, head of trading at Al Dhafra Financial Brokerage, said the markets were waiting for the second-quarter results. "Yesterdays closing was positive but there were no significant volumes. The buyers are out waiting for the results. Also, expectations are weak regarding the performance of banking and realty sectors.
"The global financial crisis continues to impact banks profits and real estate stocks are in bad shape around the world. We may see normal results in other stocks, mainly in the transportation and utility sectors, such as Air Arabia, Aramex and Tabreed."
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