Abu Dhabi: The regional stock markets are expected to start the trading week on a bullish note, say market analysts, on the back of rising international oil prices which already have crossed $94 (Dh344) a barrel and the sustainability of the global economic recovery which should help boost commodity prices going into 2011.
"Crude oil trading well above $90 a barrel should help the markets strongly. Sentiments in Saudi Arabia and Qatar are likely to be bullish.
"The UAE markets have been underperforming compared to other regional markets due to the lack of a catalyst.
"However, high oil prices will help boost the UAE markets as well," Marwan Shurrab, Assistant Fund Manager with Gulfmena Alternative Investments, told Gulf News.
Fadi Al Saeed, Head of Equities — Middle East for ING Investment Management, said the regional markets are expected to perform better in the week ahead, but due to the holiday break for Christmas and New Year on global markets, the volumes will be low.
Peak
"In 2011, real estate prices could reach a trough and banking sector provisions may reach their peak. The market valuations in the region are not high.
"There may be more IPOs (Initial Public Offerings) coming next year in the regional markets," Al Saeed said. On Thursday, the Dubai Financial Market (DFM) index closed 0.45 per cent higher at 1,631.45. The Abu Dhabi Securities Exchange (ADX) closed in positive territory; 0.23 per cent higher at 2,706.
Last week, US stocks rose for a fourth week, completing the Standard & Poor's 500 Index's recovery from the plunge that followed Lehman Brothers Holdings' 2008 collapse, after data showed the economy is gaining strength.
The S&P 500 rose 1 per cent to 1,256.77 last week, topping its close of 1,251.70 on September 12, 2008, the last trading session before Lehman filed the world's biggest bankruptcy and prompted a 46 per cent drop for the stock index through March 2009. The Dow added 81.58 points, or 0.7 per cent, to 11,573.49.
Gains
The European stocks also climbed for a fourth week last week, the longest stretch of gains since April, amid speculation that the economic recovery will continue into 2011.
However, Asian stocks fell on Friday, driving the benchmark index to its first drop in four days, as lower metal prices dragged down mining companies and Japanese exporters fell after the yen gained.
