UAE, GCC stock markets bounce back as oil prices recover

Oil prices, UAE, GCC stock markets, UAE coronavirus , Wuhan, Covid-19, tourists, Visa, Flight, Middle east, Bahrain, Kuwait, Iran, Italy

Dubai - Oil prices also bounced back on Tuesday morning after crashing 31 per cent on the previous day.

By Waheed Abbas

Published: Mon 9 Mar 2020, 11:00 PM

Last updated: Tue 10 Mar 2020, 11:20 PM

The UAE and GCC stock markets bounced back on Tuesday morning after massive selloff witnessed over the past few days, helped by recovery in oil price and hopes of stimulus package.

Dubai Financial Market General Index gained 5.2 per cent while Abu Dhabi Securities Exchange bounced back with 4.6 per cent surge on Tuesday morning. Saudi Arabia's Tadawul Index was also up by 5.4 per cent within few minutes of opening trade. Boursa Kuwait jumped 4.8 per cent.

Oman's Muscat Securities Market was also up 0.34 per cent while Bahrain and Qatar indexes rose by 1.1 per cent and 2.9 per cent, respectively, on Tuesday morning.

Crude prices also bounced back on Tuesday morning after crashing 31 per cent on the previous day, rising by more than seven per cent on the hope of economic stimulus from the US. Brent crude futures rose $2.51, or 7.3 per cent, to $36.87 a barrel by 0418 GMT, while US.West Texas Intermediate (WTI) crude gained $2.15, or 6.9 per cent, to $33.28 a barrel.

US president Donald Trump has announced that he will taking a "major" step to help the US economy avoid the impact of coronavirus outbreak.  The US president will also discuss payroll tax cut with the Republications.

"The stock market rally has always been a key proof of success for Donald Trump, and what has been happening in the market recently may pull the carpet from under his feet during the critical year of presidential election. So, if the Federal Reserve's (Fed) emergency action couldn't give the market a jolt, then it wouldn't be a surprise to see Donald Trump stepping in with massive fiscal measures to save the year," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The GCC bourses lost around 15 per cent during the previous two sessions. On a free -float basis, investor wealth in the UAE and GCC regions declined by Dh160 billion on Monday - taking the total to Dh310 billion in the first two days of trading this week.

Investors in Dubai and Abu Dhabi lost Dh10 billion ($2.62bn) and Dh16.54 billion ($4.47bn), respectively.  While Saudi investors lost Dh72.5 billion ($19.75bn), Kuwaitis lost Dh31.2 billion ($8.5bn) and Qataris lost Dh24.22 billion ($6.6bn), according to Century Financial data.

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