Traders go on a spending spree in the UAE

Markets Update: Dubai and Abu Dhabi bourses both edged up this morning as traders got their wallets out - with video.

UAE markets staged a recovery this morning as investors went on a buying spree of undervalued stocks.

The Dubai Financial Market General Index rose 1.65 per cent to 1,397.84 points and the Abu Dhabi Securities Exchange General Index edged 0.4 per cent higher to 2,560.03 points.

Yesterday, Dubai retreated 1 per cent and Abu Dhabi fell 0.4 per cent as a rebound that tracked a recovery in the Saudi market was short-lived.

Much of the gain was led by shares in so-called "defensive" stocks, or stocks that tend to do better in times of economic instability.

Air Arabia, a stock some investors buy into to diversify away from the beleaguered property sector, was up 1.4 per cent to 79 fils.

Civil unrest in Egypt, where Air Arabia has six flights from its Alexandria hub, is unlikely to have a significant impact financially, said Ankur Agarwal, an analyst at Nomura said in a recent note.

"The only impact currently [is] related to the company having to reschedule a couple of flights to accommodate the curfew requirements," Mr Agarwal said.

Higher jet fuel prices and overcapacity from Middle East national carriers are more of a concern, he said.

Telecoms operator du also advanced 2.4 per cent to Dh2.92.

Emaar Properties rose 3.28 per cent to Dh2.52 fils in Dubai this morning as more than 6.2 million shares changed hands.

In the capital, Aldar Properties was a top gainer as it added 2.3 per cent to Dh1.30. The property developer said it will pay 4 per cent interest on Dh2.8 billion of convertible bonds to sold as part of a rescue package, a much higher rate than expected.

The Saudi Tadawul opened sharply higher, extending gains from Monday. The Tadawul All-Share Index was up almost 5 per cent in early trading.