Abu Dhabi: Regional stock markets may rebound this week on the back of strong global cues, but liquidity concerns and the relatively low volume of trading could limit their rally, market analysts told Gulf News Saturday.
"The international markets may have an impact, but the liquidity in the regional markets is determined by local confidence levels," said Mohammad Ali Yasin, chief executive officer of Shuaa Securities.
"In the UAE, the edge of support point is 1,500 for DFM [Dubai Financial Market] and 2,500 for ADX [Abu Dhabi Securities Exchange]. I am hoping for a sideways movement in these markets, until new liquidity comes in. We need higher volumes for a rebound," he added.
Second quarter earnings
Yasin said the second quarter earnings of companies could likely set the direction of the UAE markets in the near term.
"There may be a correction in the downtrend market that we are into next week," Ahmad Hamdi, a market analyst, said.
"If there's a rebound on the markets, it will likely be led by the real estate sector and oil and gas companies with the feel good factor impacting other sectors as well."
He said a rebound will have to ride on the back of higher trading volumes, adding that the stocks of real estate companies — Emaar and Aldar Properties — were the ones to watch out for this week as far as the UAE stock markets were concerned.
On Friday, US stocks rose, capping the market's biggest back-to-back weekly rally since November, amid speculation that Europe's efforts to contain its debt contagion are succeeding.
In Europe, stocks advanced for an eighth day, the longest stretch of gains in 11 months, as banks rallied on speculation that stress tests will show the region's lenders are robust.
The Stoxx Europe 600 Index rose 0.2 per cent to 255.5 for a fourth consecutive week of gains.
The measure has climbed 10 per cent from its 2010 low on May 25 as concern eased that Eur-ope's debt crisis will derail the global economic recovery.
Asian stocks rose last week as well, driving the MSCI Asia Pacific Index up the most since December, as US economic reports eased concerns that deficits in Europe will slow a global recovery, and brokerages boosted investment ratings.
Within the region, Saudi Arabian and Qatari shares advanced as oil traded above $76 a barrel and global stocks gained on optimism in US economic recovery.
Abu Dhabi's ADX General Index gained 0.4 per cent. However, the benchmark indexes in Dubai, Oman, Kuwait and Bahrain all fell 0.1 per cent.
