The Dubai Financial Market (DFM) index bounced yesterday for the second time this week amid high volatility and speculative movements, which is projected to continue for the next few sessions.

The index advanced 62.34 points, or three per cent, to close at 2137.80 points on a strong rebound in Emaar and DFM stocks. Emaar advanced 6.17 per cent to Dh4.30 while the DFM stock added 5.69 per cent to close at Dh2.23. Turnover has continued to show a gradual decline this week, and yesterday was no exception with 288.6 million shares worth Dh679.3 million changing hands during the session.

High volatility continued in Emaar as the stock moved in a wide range of Dh4.1 and Dh4.34 during the session. There was a clear concentration of trading on the stock, dominating almost 48 per cent of the total trade value. High volatility also remained in other actives stocks, including the DFM, Arabtec and DSI scrips, but all of them ended the session with strong gains.

Financial stocks also added more bullishness in the DFM yesterday, as Shuaa Capital jumped 7.69 per cent to Dh1.82. Heavyweights in the banking sectors also reversed their losses in the previous session and advanced yesterday. EmiratesNBD added 2.39 per cent to end the session at Dh4.28 while DIB attracted good buying interest and advanced 1.44 per cent to close at Dh2.82.

"The current trend in the DFM indicates that the market is in the process of a double bottom formation," said Amjad Bakir, VIP sales trader at Direct Broker for Financial Services. "The DFM index may continue its upward movement to test it next resistance areas of 2157/2186 points in the near future. At these levels we expect selling pressures to appear again."

Bakir said the market might also face renewed selling pressures and the DFM index might go down to its next support areas of 2070-2020 points. "If the index breaks below these levels, the market will turn very bearish and may face strong selling pressures."

However, Bakir expressed concern over the declining turnover in the market. "Trade volumes are not encouraging investors, especially institutional ones, and they continue to remain on the sidelines. We need increasing volumes and values above Dh1 billion to ensure bullishness in the market.

"The market bounced up yesterday on positive movements in global and regional stock markets as well as oil prices, which advanced near $80 per barrel. These positive movements encouraged some investors to return to the market yesterday and buying was seen," said Bakir.

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