Little activity at home lets international markets lift local stocks
A big rise in European stocks lifted the UAE's indexes higher, as a lack of local events led sentiment on international markets to dominate local bourses.
The UAE's markets made gains after Europe's stocks started the trading week sharply higher, calming fears of investors in local markets that the market rout seen earlier this month would continue.
Stocks on the Dubai Financial Market rose 0.85 per cent to 1,464.86, while Abu Dhabi's gauge was up 0.59 per cent to 2,570.95, snapping a week-long string of losses.
Rises in large cap stocks buoyed Abu Dhabi's index, including Etisalat, which rose 0.49 per cent to Dh10.20 a share, and Aldar, which increased 0.85 per cent to Dh1.18 a share. Dubai Islamic Bank, Emaar Properties and Tabreed were among the stocks rising on Dubai's market.
The gains came after European shares opened sharply higher, with the UK's FTSE 100 index up 2.12 per cent to 5,147.71 and the FTSE MIB Index of Italian stocks rising 2.88 per cent to 15,022.52.
Most indexes on the continent have had a harrowing month as the eurozone's sovereign debt crisis shows little sign of abating. Italy's measure has lost a fifth of its value since the start of August.
But optimism over global stock markets' performance is now the biggest factor moving markets in the region, said Rami Sidani, the head of Mena region portfolio management at Schroders, the international investment house.
"Today saw a bit of a rebound in Europe," he said. "What's happening globally is the main driver, dictating regional market performance."
But a big question mark remains over the US Federal Reserve to stimulate the world's largest economy. Fed chairman Ben Bernanke used his speech at Jackson Hole last year to announce a second round of quantitative easing, dubbed QE2.
"There's now a big expectation of a QE3 on the horizon," Mr Sidani said, a possibility which would bring extra liquidity for local markets.
Elsewhere in the Gulf, Bahrain and Kuwait's markets gained, while Saudi Arabia and Oman fell. Qatar's markets ended the day flat.
Published: August 22, 2011 04:00 AM