The Dubai Financial Market (DFM) index rebounded on Sunday, ending 1.54 per cent higher as investors bought stocks across the board on the first trading day of the second half of 2018.
The index ended at 2,864.42 after falling around 3.7 per cent last week. The Abu Dhabi Securities Exchange (ADX) general index also rose 1.34 per cent on Sunday to close at 4,621.15.
The gains in Dubai were across both blue chips and mid-cap stocks, with Emaar gaining 2.44 per cent, GFH Finance House up 2.29 per cent, Arabtec jumping 7.85 per cent, and Dubai Islamic Bank rising 2.26 per cent.
Drake & Scull International, whose share prices fell 30 per cent between last Monday and Wednesday alone, ended 0.66 per cent lower. Its shares were the most actively traded on the DFM.
Despite the uplift, technical analyst Osama Al Ashry said the DFM index can reach new lows that are around 150-300 points lower. He said the index has support levels between 2,720 and 2,550.
“Any rebound as long as the index is still below 3,055 isn’t really significant because that’s where the important resistance level is. I think the DFM index is likely to target its support levels of around 2,720 and 2,550 during the third quarter,” he said.
The UAE’s markets have recently been weighed down by factors that include trade tensions between the US and China, and negative sentiment across global markets, with the Shanghai Composite entering a bear market last week.
Foreign investors have also been pulling funds out of emerging markets (of which Dubai and Abu Dhabi are a part) as the US dollar gets stronger, with the Federal Reserve adopting a more hawkish tone.
Al Ashry said that Dubai’s stocks were mostly over-sold, but still described them as “high-risk.”
“After the index crosses that 3,055 resistance level, I’ll be able to say it is in medium-risk,” he said.
On ADX, Eshraq Properties was the most actively traded stock, with its share prices rising 6.67 per cent. Meanwhile, Aldar Properties gained 1.49 per cent, as Etisalat rose 2.48 per cent.