UAE stock markets continued their rise on Tuesday, as investment flows from foreign investors return to the country after last week’s Iran deal.
“Local investors have taken heart from the Iran deal and have been returning to the stock market,” said Muhammad Shabbir, the head of equity funds and portfolios at Rasmala Investment Bank in Dubai. “This in turn has led to foreign investors looking to re-enter the market as well.”
Markets were also cheered by a sharp rise in oil prices late on Monday, amid signs of growing demand in Asian markets.
However these gains were in turn pared on Tuesday afternoon, as concerns over a global oversupply returned. Brent for May settlement dropped as much as $1.10, or 1.9 per cent, to $57.02 per barrel on the London-based ICE Futures Europe exchange. It climbed $3.17 to $58.12 on Monday.
The Dubai Financial Market General Index rose for the eighth consecutive day, closing up 1.8 per cent at 3,777.45.
Gulf Navigation and Dubai Investments were among the strongest gainers on the bourse, each ending up more than 5 per cent on the day.
The Abu Dhabi Securities Exchange General Index recorded its seventh straight positive close, ending up a marginal 0.15 per cent at 4,560.72.
RAK Properties made the index’s largest one-day gain, ending up 5.88 per cent at 72 fils.
However, UAE markets remain vulnerable to a reversal of fortune, as demonstrated by this week’s poor purchasing managers index numbers from HSBC, according to Mr Shabbir.
“The most recent PMI numbers show that there’s still some softness in the economy,” he noted. “So we’ll see how long this rally lasts.”
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