Abu Dhabi: The Dubai Financial Market (DFM) index led gains across the Gulf’s equity markets on Sunday in the first trading session since Opec (Organisation of Petroleum Exporting Countries) announced it plans to cut oil production.

The announcement from Opec led to a surge in oil prices, with Brent crude jumping over 17 per cent in total the past few trade sessions, with the optimism being echoed in equity markets.

The DFM index on Sunday rose 1.67 per cent to reach 3,417.05, in a risk-on mode as investors mainly bought smaller cap stocks.

“When you look at the individual stocks, what’s doing well are the high-beta stocks. Oil prices are giving investors more appetite to take on risk, so what you’re seeing is an offloading of the more defensive-natured stocks in favour of the more high-beta stocks,” said Saleem Khokhar, head of fund management at the National Bank of Abu Dhabi’s asset management group.

In Dubai, smaller cap stocks like Union Properties jumped 10.5 per cent, as DFM share prices rose 4.39 per cent, Arabtec gained 2.31 per cent, and Marka gained 7.55 per cent. Dubai Ports World surged 9.47 per cent.

Abu Dhabi

Meanwhile, the Abu Dhabi Securities Exchange (ADX) general index fell 1.09 per cent mainly as heavyweight etisalat fell 3.49 per cent as investors sold defensive stocks.

In terms of traded values, they remained high in Dubai, with Dh1.33 billion in total trade.

“We had come off some very low traded values, and people were very cautious going into the Opec meeting, wondering if they could make a success of it. I think the initial outcome of [the Opec meeting] was positive, so you would expect to see values increase going into year-end. There’s still opportunity to be picking up stocks that are very reasonable in terms of fundamentals and price,” NBAD’s Khokhar said.

Though he pointed that trade may slow down towards the second half of December amid Christmas holidays, Khokhar said he expected some more positive moves in the UAE equity markets.

Of the 37 stocks traded on DFM, 25 went up, eight went down, and four remained unchanged. Of the 30 stocks traded on ADX, 12 advanced, 10 declined, and eight remained flat.

GCC

Elsewhere in the GCC, analysts are wary of Saudi Arabia’s Tadawul and high valuations there.

“We’ve had a fantastic run in Saudi Arabia over the last month or so, with Saudi moving 18 per cent-plus in a very short period of time, so I wouldn’t be surprised to see some sort of profit-taking kicking in. UAE and Qatar have not rallied as much as Saudi did, so you’ve got the potential for them to carry on,” Khokhar said.

On Sunday, the Tadawul All Share Index rose 0.52 per cent to reach 7,130.34, as Qatar’s QE index gained 0.97 per cent to 10,010.27, and Bahrain’s main index slid 0.15 per cent to 1,175.93.