07/12/2016 06:08 AST
The UAE’s main equity indexes gained more than one per cent on Tuesday amid gains in European and Asian markets, which managed to quickly shrug off the results of the Italian referendum.
Just a day earlier, Italian Prime Minister Matteo Renzo announced he will resign after Italians voted against constitutional changes backed by the government. Though the results of the referendum took the markets by surprise, European indexes bounced back in a matter of minutes, with the buying sentiment rippling across global markets.
On Tuesday, the Dubai Financial Market (DFM) index rose 1.31 per cent to reach 3,452.41, while the Abu Dhabi Securities Exchange (ADX) general index went up 1.27 per cent to reach 4,355.83.
In Dubai, the rise in the index was backed by high trading values, which reached Dh1.1 billion.
“We’re seeing US indexes reaching new highs, while Asian indexes are trading near their highest levels, so, of course, it makes sense for the UAE markets to also gain. There’s optimism in the market, and I think fourth-quarter results will be better than expected, so that’s spurring some buying,” said technical analyst Osama Al Ashry.
He added, “The DFM index has a resistance level at 3,470, which is only a few points away, and if it crosses that, the index can close the year at new highs. By next quarter, I think it can reach 3,789.”
Trade continued to focus on smaller-cap stocks such as Gulf Finance House, which accounted for nearly 23 per cent of the market’s total trade value. Union Properties was also among the most actively traded in terms of value, and gained 5.05 per cent, as DFM share prices rose 2.52 per cent, and Arabtec ended the day unchanged.
From a stock-specific perspective, Al Ashry recommended buying Arabtec shares to short-, medium-, and long-term investors, adding that share prices may cross Dh1.53 this month.
As for the broader DFM view, he said, “I expect liquidity to remain strong on DFM, and trade values could well reach Dh2 billion because there’s a lot of buying on stocks like UPP, DIB, and Deyaar, which are all bringing in liquidity to the market. There’s a risk appetite for these stocks because their prices are attractive, so that can continue.”
On the ADX, the highest gains went to the market’s powerhouses such as banks and property developers. Abu Dhabi Commercial Bank (ADCB) topped the gainers’ list with a 3.55 per cent increase, followed by Aldar Properties with 2.36 per cent, National Bank of Abu Dhabi with 2.34 per cent, and Abu Dhabi Islamic Bank with 2.02 per cent.
Of the 40 stocks traded on the DFM, 18 went up, 14 went down, and eight remained unchanged. Of the 24 stocks traded on ADX, 11 advanced, five declined, and eight remained flat.
Gulfnews
Please wait...
