Shares in the UAE jumped the most in the world after Brent oil prices slowed their decline and investors judged the markets oversold.
The DFM General Index rose 4.4 per cent, the most since December 21, to 3,600.33 at the close, the biggest advance among more then 90 major indexes tracked by Bloomberg. Abu Dhabi’s ADX General Index was the second-best performer, adding 2.6 per cent. Brent, the benchmark for more than half the world’s oil, dropped 0.5 per cent to $50.83 per barrel at 10.22am in London after slipping 3.8 per cent yesterday.
The 14-day relative strength indexes of the country’s two main gauges rebounded from the weakest levels in about three weeks, rising to 42.8 from 37.2 yesterday in Dubai and 45.9 from 39.9 in Abu Dhabi. A level below 30 indicates to some analysts that securities have fallen too far.
“The markets are oversold following the recent oil driven plunge,” Tariq Qaqish, a fund manager at Al Mal Capital, said by telephone from Dubai. “Investors are speculating oil should stabilise at these levels.”
Market volatility across the oil-producing GCC has surged in recent weeks as the price of Brent crude dropped to below $55 for the first time since May 2009. The UAE’s two main gauges were among at least six measures in the region that fell into a bear market since November 30, with many of those rebounding shortly after.
Emaar Properties, the developer with the biggest weighting on Dubai’s index, led gains in the emirate. The company’s shares jumped 5.4 per cent, the most since December 21, to Dh6.85. Arabtec, the UAE’s largest listed builder, added 8.9 per cent, also the most since Deember 21.
In Abu Dhabi, First Gulf Bank advanced 5.3 per cent, the most in three weeks.
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