US, Europe markets climb, cheaper valuations lift UAE
Dubai - Oil prices and interest rates that are likely to guide short-term market direction.
Equity markets in the UAE, Saudi Arabia and India, Europe and United States gained after US President Donald Trump's latest statement at G7 Summit revived hope to end trade war with China after resuming high-level talks in near future.
The Dubai's main index closed 0.5 per cent higher, led by one per cent rise in Emaar Properties and 0.6 per cent gain in Dubai Islamic Bank, at 2,729.04 points. The Abu Dhabi market registered 0.6 per cent gains after three consecutive days of losses, with Emirates Telecom increasing 0.6 per cent and market heavyweight First Abu Dhabi Bank edging up 0.5 per cent.
"The UAE is doing rather well and I attribute that to the fact that both Dubai and Abu Dhabi have lost 6 per cent to 7 per cent this month alone from a benign starting point," said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital.
"Therefore, valuations are reasonable, especially for companies that have reported healthy second quarter results," Bhandari added. "Investors are adding exposure to high quality companies."
However he cautioned that it was necessary to keep a close eye on global factors such as the US-China trade talks, Oil prices and interest rates that are likely to guide short-term market direction.
Saudi Arabia's Tadawul bounced back from earlier losses on Monday as the main index rose 0.2 per cent after falling in previous three sessions. Banque Saudi Fransi surged 2.1 per cent and Saudi Electricity soared 2.8 per cent.
The Qatar index fell 0.3 per cent and Egypt's blue-chip index fell 0.4 per cent.
Sensex bucks Asia trend
Barring Indian equities, Asian markets ended in the red as they closed before the US president issued statement about trade talk resumption with Beijing.
India bourses shrugged off trade war concerns and investors rejoiced over finance minister Nirmala Sitharaman's measures announced last week to combat slowdown and improve foreign investor confidence. The BSE Sensex jumped 792.96 points, or 2.16 per cent, to close on Monday at 37,494.12, while the Nifty gained 228.50 points, or 2.11 per cent, to 11,057.85.
Japan's benchmark Nikkei 225 started plummeting as soon as trading began and finished at 20,261.04, down 2.2 per cent. Australia's S&P/ASX 200 slipped 1.3 per cent to 6,440.10. South Korea's Kospi lost 1.6 per cent to 1,916.31. Hong Kong's Hang Seng dropped 1.9 per cent to 25,680.33, while the Shanghai Composite was down 1.2 per cent at 2,863.57.
Europe, US rise
Equity markets in Europe pared losses following Trump's statement about US-China trade talks resumption. France's CAC 40 was up 0.6 per cent to 5,360, while Germany's DAX rose 0.5 per cent to 11,665. Markets were closed in Britain for a national holiday.
The US markets also opened on positive note as the major indices rose in line with the European equities. In early trade, the Dow Jones Industrial Average rose 233.91 points, or 0.91 per cent, to 25,862.81 and the S&P 500 gained 23.57 points, or 0.83 per cent, to 2,870.68. The Nasdaq Composite added 70.95 points, or 0.92 per cent, to 7,822.72 were up 41.75 points, or 0.56 per cent.
"The sentiment today is conciliatory, the president is trying to walk back," said Art Hogan, chief market strategist at National Securities in New York.
"Whether or not he (Trump) has a phone call with China doesn't matter, the point is that he is attempting to keep the September meeting scheduled and get back to the negotiating bit."
- With inputs from Reuters