Early optimism gives way to lacklustre gains

Market Wrap: Local markets rally slightly but fail to reignite the enthusiasm of earlier in the year, as volumes dwindle on both markets.

Stock markets ended a disappointing week with lacklustre gains for Dubai's market, though early gains for Abu Dhabi's stocks faded as it ended flat.

Dubai Financial Market General Index rose 0.52 per cent to 1,534.35, though early optimism on Abu Dhabi's measure petered out towards the close of trading, ending down 0.08 per cent to 2,598.23.

Investors began in high spirits, following a rally in Asian stocks, but early frothiness soon settled without any market news to stir sentiment among local traders.

The lack of local catalysts was leaving stocks adrift as volumes slumped, traders said.

"We've been trading in step with what's happened on global markets," said one trader, who asked not to be identified.

Stocks in Dubai and Abu Dhabi have fallen by around 2 per cent this week, as markets settle in for a summer expected to have few catalysts for upward growth.

"In June, we expect a lot of negative news," said Talal Touqan, head of equity research at AlRamz Securities, adding that Europe's debt crisis was likely to continue to glower over local market sentiment as traders wait to see whether MSCI reclassifiesthe UAE as an emerging market.

The UAE's property companies were among the few stocks seeing large amounts of trading, with Emaar Properties rising 1.32 per cent to Dh3.06, Drake & Scull International up 3 per cent to Dh1.03 and Deyaar Development increasing 0.67 per cent to Dh0.302.

Investors said continuing uncertainty over the future of Qatar's hosting of the 2022 FIFA World Cup was setting traders speculating over the outlook for the UAE property developers, which would be called upon to construct stadiums and infrastructure for the tournament.

Elsewhere in the Gulf, Qatar's market rose, while Oman and Bahrain fell. Kuwait was flat.