UAE markets buck global trend as world stocks sink after Fed move

The UAE stock markets on Thursday showed a resilient performance and bucked global trends by recording smart gains despite an increase in interest rates by the US Federal Reserves, European Central Bank (ECB) and Bank of England (BoE).

Other GCC stock markets moved in different directions as traders reacted to the decesion of Federal Reserves, ECB and BoE to increase interest rate by 50 basis points and to the developments in energy markets amid fear of economic recession after a hawkish stance from the US Federal Reserve.

Oil prices’ direction was uncertain after the Federal Reserve’s move to increase interest rate by 50 basis points while supply and demand concerns affected traders’ expectations.

"The Dubai stock market was relatively volatile with no clear direction as traders reacted to the interest rate decision of the US central bank. As a result, the main index could continue trading sideways," said Abdelhadi Laabi, chief marketing officer at Emporium Capital.

The Dubai's main index rose 4.38 points, or 0.13 per cent, to 3,3315.23 points as Dubai Islamic Bank and Salik shares surged two per cent and 1.23 per cent, respectively. Emaar shares dropped 2.5 per cent and Dewa fell 1.68 per cent.

In Abu Dhbai, the benchmark index staged a strong rebound and climbed 1.2 per cent to 10,144.53 points as investors showed interest in newly-listed companies. Fertiglobe shares soared 4.95 per cent to Dh4.24 while Alphadhabi and Multiply shares surged 3.95 per cent and 2.95 per cent, respectively.

"The Abu Dhabi stock market rebounded after a series of losses as the Federal Reserve’s decision came up as expected and oil prices maintained a stronger profile for the last few days. The main index could see more gains if conditions remain favourable," Laabi said.

After volatility in early session, Saudi Arabia’s benchmark index climbed 0.4 per cent, rising for a second session, led by a 5.5 per cent jump in Retal Urban Development Co after the developer signed agreements with Roshn Real Estate to develop villas. The Saudi index, which touched a 20-month low earlier this week, posted a weekly gain of 0.4%, its first in eight weeks.

"The Saudi stock market was seeing some volatility and could rebound after extensive losses if oil prices remain on the upside," Laabi said.

"The Qatari stock market continued to fall as volatility in natural gas prices fuelled concerns. Traders were also concerned with rising interest rates and high inflation locally," he said.

The stock market in Oman declined again as traders move to secure their gains after a long uptrend. The main index could see more price correction in this regard, he said.

The Egyptian stock market extended new gains as local investors continue to buy. However, trading volumes are starting to soften which could lead to a reversal in the near future.

Global stock market sank and the US dollar rose after the interest rates hike by major central bank who signalled they would go higher to fight inflation.

In Europe, London's FTSE 100 fell 0.4 per cent in the midday trading while Frankfurt's Dax and Paris CAC 40 dropped 1.1 per cent each.

Earlier in Asia, Tokyo stock market down 0.4 per cent while Shanghai's composite index declined 0.3 per cent at 3,168.65 points. Hong Kong's Hand Send Index dropped 1.6 per cent and closed at 19,368.59 points.

— muzaffarrizvi@khaleejtimes.com

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