Dubai: On the back of big prior week gains, UAE stock markets were tracking an even bigger weekly high, as investors bet on a quicker-than-expected rebound from pandemic-induced weakness.
Dubai Financial Market (DFM) index amassed a massive 4.6 per cent gain at 2,133 points on Sunday, after closing the prior week up 1.98 per cent. During the week the bourse had risen 4.8 per cent, rising four out of the last five sessions.
“The recovery rally is still in progress and bias stays on the upside,” noted Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities, referring to how the Dubai benchmark has the potential to rise further.
The Abu Dhabi Securities Exchange (ADX) gained 2.4 per cent at 4,407 points, continuing to rise after amassing gains for the last five straight sessions – during which it rose 4.5 per cent.
“We expect continuation and target 4400/4600 (point-level) in the coming few sessions,” Prakash added, expecting more of the rally currently seen in Abu Dhabi stocks in the days to come.
Supporting regional market gains were higher oil prices, as Brent and US crude benchmarks each gained nearly 6 per cent on Friday. OPEC and its allies agreed to extend their deeper level of production cuts by an additional month.
“Spurred on by the tremendous gains in oil prices over the past two months, OPEC+ countries likely saw the benefit of holding production lower for longer — even if for just an additional month,” wrote Edward Bell, commodity analyst at Emirates NBD.
Brent futures settled at $42.3-a-barrel last week, up nearly 20 per cent, while WTI was up by 11 per cent to close at $39.55-per-barrel.
“The OPEC+ cuts have been a big part in helping oil prices recover in the last two months... This weekend’s deal will also help to keep a bid under oil prices in the near term as will a broad rally in risk assets,” Bell added.