Dubai leads Asian market rebound

Abu Dhabi: Lower interest rates and sound corporate performance succeeded in reviving UAE stock markets yesterday as they recovered more than Dh59.6 billion of losses.

The high volatility of the indices was apparent with the Dubai benchmark surging 10.45 per cent to 5,755.21, and Abu Dhabi's general index rising 6.34 per cent.

The rally in Dubai shares added fuel to the recovery on Asian markets yesterday, reversing their recent gut-wrenching plunge as investors welcomed a hefty, surprise interest rate cut by the US.

But US and European stocks fell deeper into negative territory after the European Central Bank hinted it would not follow its US peer and slash interest rates.

Bullish investors reacted to the US Federal Reserve Bank's sudden cut of 75 basis points, matched by the UAE's Central Bank, representing a strong catalyst for the market, in addition to the widely spread relief in international markets.

"The reaction of the markets to the roller coaster ride that swept through international markets had to end sooner or later, as the strong fundamentals here, especially when the results season is in full gear, meant that there was still room for more growth," commented Ahmad Abdul Rahman, head of research and financial analysis at Amanah Capital.

"The massive withdrawal of foreigners was not related to any shortcomings of UAE's equities, but only a necessity arising from exposed positions overseas, and for the coming period, emerging markets in general and the UAE in particular will provide a strong alternative for investors, given the high potentials of growth," he added.

The value of traded shares exceeded Dh8 billion as investors rushed to grab the opportunity from undervalued companies at a time of disclosing annual financial statements, that are mostly exceeding expectations.

In Dubai, Emaar Properties maintained the position of the most traded share in terms of value, accounting for Dh1.87 billion worth of trading, and surging by more than 11 per cent to Dh13.55.

Most of the leading shares recorded double digits gains, especially those that were hit the most during the past week's severe downtrend.

Aldar gains

Dubai Financial Market (DFM) shares recovered 14.84 per cent to close at the day at Dh5.03 while Deyaar Development restored 14.71 per cent to end at Dh2.73 and Air Arabia recorded 14.61 per cent to Dh14.61.

In Abu Dhabi, the recovery wave swept throughout the market, restoring the value of most of the listed companies by an average of eight to nine per cent.

The general index surged by 6.34 per cent to 4,775.20 while the value of traded shares stood at Dh1.8 billion, bringing the total value of traded shares up to Dh8.14 billion.

The real estate and energy sectors recovered substantially led by Aldar properties, which recovered 9.24 per cent to close at Dh10.40, and Dana Gas, which restored 8.57 per cent to close the trading at Dh2.28.

The index's heavy weights like the National Bank of Abu Dhabi and etisalat recorded substantial gains of 8.01 and 6.71 per cent to close at Dh23.60 and Dh23.05 respectively.

In Hong Kong, the Hang Seng index surged 10.7 per cent to 24,090.17, regaining much of the 13.7 per cent it had shed over the previous two days.

Nikkei 225 index rose two per cent, while India's Sensex climbed 5.2 per cent.

The Dow Jones industrial average was down 144.69 points, or 1.20 per cent, at 11,827.88.

The Standard & Poor's 500 Index was down 16.34 points, or 1.25 per cent, at 1,294.16. The Nasdaq Composite Index was down 37.87 points, or 1.65 percent, at 2,254.40.

The Nasdaq crossed the threshold of a bear market, which is defined as falling 20 per cent or more from a record closing high. But to confirm the onset of a bear cycle, a prolonged period in which investment prices fall, the index needs to end at least 20 per cent off its closing peak.

In Europe, The FTSE-100 share index fell 165.41 points to 5,574.70 at 1400 GMT. The DAX index was showing a loss of 4.78 per cent at 6,445.62 points at 1445 GMT.

- With inputs from agencies