Dubai: As markets rallied after a busy few days of earnings, global and regional investors are seen betting big on another strong set of quarterly company results this week.
Global equities rallied sharply last week as the so-called ‘phase-one’ trade agreement between the US and China was eventually signed and the first batch of corporate earnings came in better than expected.
“Trade deal adds to hopes of a more upbeat 2020,” analysts at Capital Economics wrote in a note. “The Phase One US-China trade deal removes a downside risk that had clouded the outlook for China’s exports, but it could have some negative implications for a handful of other emerging markets.”
Wall Street ended the week with fresh record highs after the release of solid China and US economic data. China’s industrial production came in well ahead of expectations while December US housing starts surged nearly 17 per cent. Meanwhile, 72 per cent of the S&P 500 companies that have reported thus far have beaten analyst expectations, a survey showed.
MSCI’s gauge of stocks across the globe marked the index’s fifth straight day of setting records, ending the week by edging up 0.21 per cent.
Week ahead
“The absence of any follow-up rhetoric on geopolitical tensions also provided support to risk assets,” said Aditya Pugalia, director of financial markets research at Emirates NBD. “Investors, both globally and regionally, will continue to keep an eye on corporate earnings.”
The US stock market will be closed Monday in observation of the Martin Luther King Jr. holiday. Investors will watch out for President Donald Trump speaking at the World Economic Forum at Davos, Switzerland on Tuesday. More Wall Street earnings will ensue, with IBM, Netflix and United Airlines all scheduled to report quarterly earnings after the Tuesday’s closing bell.
The focus this week will also be on central banks with monetary policy decisions from the European Central Bank, the Bank of Japan and the Bank of Canada.
More local gains
UAE markets extended the positive streak for the seventh consecutive session on Sunday. In terms of weekly performance, the UAE markets performed positively as Dubai and Abu Dhabi were up by 2.87 per cent and 2.04 per cent, respectively.
Among other GCC markets, regional Markets closed on a positive note as all six indexes closed in green. While the main benchmark in Saudi ended the week up 1.4 per cent, Kuwait’s benchmark rose 0.8 per cent, Egypt’s EGX30 ticked up 0.7 per cent. Indices in Qatar, Bahrain and Oman all rose above 2 per cent on easing US-Iran tensions.
Dubai’s DFM rises for 7th straight session
The benchmark index in Dubai rose over 1 per cent on Sunday, gaining for the seventh straight session, helped by gains across the board.
The top index on the Dubai Financial Market (DFM) ended up 1.2 per cent, or 34.8 points, at 2,863.09 points, while the Abu Dhabi Securities Exchange (ADX) slipped 0.1 per cent to 5,174.
The gains were supported by UAE Cabinet’s approval of a draft law which allows family businesses to list on financial markets, which analysts said will bring in a much-needed reform of markets and economy, if implemented.
The country’s top lender Emirates NBD led the index gains by rising 2.2 per cent, alongside real estate heavyweight Emaar Properties rising 1.4 per cent. Among other gainers Aramex rose 1.7 per cent, Dubai Islamic Bank edged up 0.7 per cent and Arabtec gained 2.4 per cent.
