Dubai: Equity markets in the UAE are expected to be stable next week, after gaining more than 4 per cent in the last three sessions, as more companies declare their September quarter results.

The Dubai Financial Market General Index ended 0.60 per cent higher at 4,573.05 on Thursday, after gaining 3.84 per cent in the previous two sessions. The index shed more about 14 per cent last week.

“Markets will be more stable than they were the week before. We will be trading in the range 4,500-4,800,” Mohammad Ali Yasin, managing director at National Bank of Abu Dhabi Securities told Gulf News.

In the absence of any volatility in US markets, and oil prices, investors will be looking for internal factors, analysts said.

Euro-area manufacturing unexpectedly improved, indicating the region may avoid a deeper economic slump. Concern that a Europe-led slowdown in global growth would hurt the world’s largest economy, just as the Federal Reserve winds down stimulus, erased as much as $2.1 trillion in U.S. equity values after they reached a record on Sept. 6.

US stocks bolted higher Thursday following a series of mostly strong earnings reports from Dow members Caterpillar, 3M and others.

The Dow Jones Industrial Average shot up 216.58 points (1.32 per cent) to 16,677.90. The broad-based S&P500 gained 23.71 (1.23 per cent) at 1,950.82, while the tech-rich Nasdaq Composite Index soared 69.95 (1.60 per cent) to 4,452.79.

Oil prices resumed their slide in Asian trade Friday following a sharp rebound the day before as investors wait for more signs of economic growth in Europe, analysts said.

US benchmark West Texas Intermediate for December delivery was down 40 cents to $81.69 a barrel in afternoon trade and Brent crude for December dropped 29 cents to $86.54.

“Strong corporate results will ensure some stability. We will see some selective buying like Emirates NBD, and DIB. We will continue to have influence from international markets and crude oil,” said Yasin.

Banks are expected to report higher earnings supported by lower provisions and strong loan growth in the consumer banking business. With the rising business confidence in the corporate sector, recovery in the real estate business and increased government spending are expected to drive asset growth and profitability of UAE banks according to SICO, a Bahrain-based investment bank.

In the UAE, credit growth in the banking sector was about 4 per cent for the first six months of this year. Analysts expect the overall credit for the year to be about 7 per cent with a stronger outlook for next year.

Credit rating agency Standard and Poor’s expect around 8—9 per cent credit growth for the sector in 2014-2015, in line with healthy economic activity driven by strong government spending, and non-oil private sector growth.

Emirates NBD, the largest bank in UAE by total income and branch network, on Wednesday reported a 51 per cent increase in the net profits to Dh3.9 billion for the first 9 months of 2014. Shares of Emirates NBD ended 2.2 per cent higher.

RAKBank on Thursday reported a nine-month net profit of Dh1.1 billion, down 64 million (about 5.3 per cent) compared to Dh1.13 million reported in the corresponding period in 2013.

Traded values in the markets are likely to increase due to market stability.

“October would be better in terms of traded values if we continue to have good corporate results. If there is a stability in the market, October will be a better month compared to September,” said Yasin.

Out of favour:

“We are not in favour of construction sector because it is competitive and with lower margins,” Tariq Qaqish, the head of asset management at Al Mal Capital.

Arabtec, the biggest publicly traded construction in the UAE, has shed more than 8.5 per cent since September 30. However, the construction sector is expected to contribute to 11 per cent of the UAE’s GDP in 2015.

According to the International Monetary Fund, the population of UAE is expected to reach 6 million by 2015 from 5.4 million in 2010 while the increase in expatriate population, which accounts for more than 80 per cent of the country’s population, constitute the main growth drivers for increasing demand for residential and commercial property units.