Rally in UAE equities to continue

Abu Dhabi: The regional stock markets are set to rally in the week ahead on the back of recent bullish global market sentiments which saw the Dow Jones Industrial Average surge past the 11,000 mark on Friday.

Market analysts say with the US readying to come out with yet another stimulus package to shore up the economy, the near-term view on the equity markets is positive because any such move will boost spending and stoke inflation, two definite indicators for an economy on the upturn.

Tariq Qaqish, Fund Manager with Al Mal Capital, said the regional markets this week will maintain their positive trend backed by the movement on international markets.

"The oil prices too, remain high, which is a positive for the regional oil producers. We are still co-related with the international markets, especially the US. Any strong movement on the international market would mean more investment in the regional equity markets," added Qaqish.

"We may see higher highs on the international markets in the coming days. Most markets are giving bullish signals," said market analyst Ahmad Hamdy.

"As far as the UAE markets are concerned, the Dubai Financial Market will continue its bullish trend this week and the Abu Dhabi market will follow the sentiments in Dubai. Due to the bullishness on the international markets, there's room for a strong upside move on the UAE markets, near-term," Hamdy added.

On Thursday, the Dubai Financial Market (DFM) index rose 1.04 per cent to 1,722.55. In Abu Dhabi, the Abu Dhabi Securities Exchange (ADX) general index rose 0.29 per cent to 2,685.30.

Last week, US stocks advanced, sending the Dow Jones Industrial Average above 11,000 for the first time since before the May 6 crash, on speculation the Federal Reserve will buy more debt to boost the economy.

The S&P 500 advanced 1.7 per cent to 1,165.15 last week. The Dow rose 176.80 points, or 1.6 per cent, to 11,006.48. Both indices closed at the highest levels since May on Friday after the economy lost more jobs than forecast last month, bolstering speculation the central bank will attempt to stoke growth.

Asian stocks rose for a sixth week last week, on speculation that policymakers will do more to spur economic growth after Japan's central bank cut its benchmark interest rate and Australia unexpectedly kept its key rate unchanged.

However, on Friday, most European shares fell as a government report showed the US economy lost more jobs than estimated in September.