Stock DFM Dubai stock market traders
UAE stocks are holding the line on Wednesday while their Asian peers are seeing some serious sell-offs. Image Credit: Antonin Kelian Kallouche/Gulf News

Dubai: UAE stock markets are holding relatively steady compared with the steep drops elsewhere in Asia, with India’s Sensex down by more than 1,000 points and Japan’s Nikkei by 450. In contrast, the DFM in its first hour, is relatively flat, up 6.80 points, while the ADX has gained just over 9,500 points.

In Saudi Arabia, the Tadawul, which has just opened, has started positive. “It’s all about oil today for UAE and GCC stocks – and the prospect that oil could be pushing even higher,” said Vijay Valecha, Chief Investment Officer at Century Financial.

Real estate and banking stocks in the UAE are treading in positive territory for now. In Abu Dhabi, FAB and Aldar have built up some momentum, while on DFM, Emirates NBD and Air Arabia too made early gains.

“UAE investor sentiments are boosted by decent dividends being announced,” said another analyst. “Plus, there are the expectations building around upcoming IPOs from DEWA, Salik, and, even, the Borouge company in Abu Dhabi (in which ADNOC is a partner).”

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All eyes on OPEC

OPEC, the oil industry grouping, is holding a meeting today and any decisions emerging from that will, more than anything dictate what is in store for oil prices. It was felt that the US and allies announcing the release of 60 million to 70 million barrels from their oil reserves would cool prices down. That, however, has not been reflected yet in the oil markets, with oil breaching $110 and looking good for some more.

Russia, incidentally, is part of the wider OPEC+ grouping that in recent years has been influential in setting oil production – or cut – quotas.

“The barrel of US crude jumped more than 11.5 per cent yesterday and soared another 2 per cent to $111 mark this morning,” said Ipek Ozkardeskaya, Senior Analyst, Swissquote. “(Selling) the strategic reserves will help boost oil supply for only some time; - it’s not a durable solution. Therefore, today’s OPEC meeting is critical.”

OPEC’s position

Russian oil is already trading with a significant discount to WTI and Brent crude, according to Ozkardeskaya, as “refineries and trading houses are turning away from Russian crude purchases in fear and in preparation of future sanctions.”