Dubai: UAE indices returned to positive territory as investors stayed fixated on signs that the pandemic was stalling in some global hotspots and governments were seeking to partially lift lockdown restrictions.
Dubai Financial Market (DFM) gained 2.8 per cent at 1,939 points, while Abu Dhabi Securities Exchange (ADX) rose 1 per cent to 4,178 points. The indices had slipped on Monday after a lackluster OPEC deal, which had put an end to two straight days of gains by both benchmarks.
Lenders lead gains
BAnks led the way on Dubai and Abu Dhabi bourses, with Emirates NBD Bank leaping 3.4 per cent and the country’s largest lender - First Abu Dhabi Bank - rising 1.5 per cent.
The gains were supported by the UAE central bank’s efforts urging commercial lenders to use the $70 billion-worth of capital and liquidity measures launched by the regulator to support the economy during the coronavirus outbreak.
Other Gulf stock markets too rose on Tuesday, in line with peer markets in Asia and Europe. The key benchmarks in Saudi Arabia, Qatar, Bahrain, Oman were all seen up 1 per cent. The index in Kuwait was up 4 per cent.
Plan to ease lockdowns
Governments are weighing up whether to allow some partial reopening of their economies as COVID-19 cases stabilize in some countries. While Spain and Austria allowed partial returns to work after the Easter holiday, Britain, France and India extended their shutdowns to try to rein in the outbreak, with UK and Germany hinting at a prolonged lockdown.
Ten state governors in US, now the epicenter of the outbreak, began to coordinate gradual economic openings, after seeing a sustained decline in number of patients admitted and those at intensive care units, and percentage of positive tests of the virus.
Global market gains were also helped by new data out of China, which showed that exports fell in March by much less than analysts had anticipated as the country ended lockdowns.
Will take time for normalcy
“No matter when restarts begin to happen, there is unlikely to be a full-scale burst of activity as health authorities will likely want to limit interactions to prevent a resurgence in COVID-19 cases,” analysts at Emirates NBD wrote in a note. “That suggests any consumption-oriented recovery will be drawnout and insipid, weighing on growth over a much longer period.”
However, much rattled investor sentiment refused to be completely at ease with the World Health Organization announcing that any COVID-19 vaccine is still at least a year away. Also, Brent prices remain pressured, slipping 0.4 per cent, to $31.6 a barrel by 11:00 GMT after settling 0.8 per cent higher on Monday.
