Abu Dhabi: Dubai’s main equity index jumped nearly 2.8 per cent on Monday to end at its highest level since October 2015 as oil prices rallied after non-Opec (Organisation of Petroleum Exporting Countries) members agreed to cut oil production levels.

Brent crude prices were over $57 (Dh209.2) a barrel on Monday, rising over five per cent to reach their highest prices since July 2015, after Russia and other non-Opec countries reached a deal over the weekend to collectively cut 558,000 barrels a day.

Saudi Arabia also signalled it was ready to cut production by more than it agreed on during the November 30 meeting.

The rise in oil prices, coupled with much-anticipated clarity and unity coming out of oil producers, sent the Dubai Financial Market (DFM) index up 2.77 per cent to end at 3,657.11, with trade values spiking to Dh1.85 billion.

“Turnovers are actually a very important thing to talk about. Today’s turnover in Dubai was Dh1.8 billion, and that’s extremely good because it means the market is starting to pick up again where we lacked in appetite over the past couple of months. The index breaks above the key resistance point of 3,600, and it managed to close over it with a strong turnover, so that’s a very strong note,” said Marwan Shurrab, fund manager and head of trading at Vision Investment & Holdings.

He added, “We need turnovers to remain above the Dh1.5 billion level to maintain such appetite for more upside. We also need [DFM index] to remain above the 3,400-3,500 level … so we’re talking about a positive uptrend that’s starting to show. Performance should be positive going into year-end and beginning of 2017.”

Trade values were also higher on the Abu Dhabi Securities Exchange (ADX) reaching Dh325.8 million compared to less than Dh200 million over the past sessions. The ADX general index rose 0.71 per cent to 4,549.05.

Risk appetite remained strong on DFM, with trade concentrated on smaller-cap stocks like UPP and Arabtec, which rose 8.33 per cent and 5.15 per cent respectively. DFM blue chip Emaar Properties also went up 5.14 per cent.

“Overall, there are a couple of main catalysts supporting the market. It’s the end of the year, so this is an end of year rally. Secondly, US performance is very strong, and that’s increasing the appetite for risky assets, and thirdly, commodities [oil] coming back above the $50 level and showing strong performance,” Shurrab said.

He pointed that any decision-taking by the US Federal Reserve, which starts its meeting on Tuesday, will be major catalysts for US and European markets, and that sentiment will then have an impact on investors in UAE. There is almost a 100 per cent consensus in markets that the Fed will hike interest rates at Tuesday’s meeting.

Of the 39 stocks traded on DFM, 29 went up, nine went down, and one remained unchanged. Of the 31 stocks traded on ADX, 17 advanced, 11 declined, and three remained flat.