Dubai: The stock markets in the UAE and GCC were in a tug-of-war state as investors weighed positive news on the economic front and a ‘catastrophic’ overnight explosion in Lebanon that killed at least 100.
The Dubai Financial Market (DFM) ended nearly flat on Wednesday, closing up 0.02 per cent at 2,079 points. Meanwhile, the Abu Dhabi Securities Exchange (ADX) dipped 0.3 per cent at 4,305 points.
“A massive explosion in Beirut presents an additional challenge to a country already struggling with a collection of crises.. and the resulting concerns over regional stability served to push Brent crude higher in the immediate aftermath,” noted Daniel Richards, MENA Economist at Emirates NBD.
However, on the macroeconomic front, there were increasing signs of a post-pandemic recovery. In the world’s largest economy US, factory orders during June came in much better than analyst expectations and the country’s manufacturing activity continued to recover in July as well.
In the UAE, Purchasing Managers’ Index (PMI) – an indicator of economic health for manufacturing and service sectors – inched up to 50.8 in July, from 50.4 the previous month.
This marked the second consecutive month of positive, expansionary readings, after the index spent the first five months of the year in sub-50.0 territory, Richards added.
Also, Saudi Arabia’s headline PMI rose to 50.0 in July from 47.7 in June, the highest reading since March, indicating a stabilization in the non-oil private sector after four months of contraction.
The largest bourse in the Gulf state, Saudi Arabia’s Tadawul, which traded after a five-session break, edged up 0.5 per cent, while Bahrain’s All Share Index traded largely flat. While Kuwait’s top benchmark gained 0.4 per cent, the index in Jordan slipped 0.6 per cent. Qatar remained closed for the Eid holidays.