Dubai, China lead market rally

Jameel Ahmad, global head of currency strategy at FXTM, said that the leap forward in momentum for Dubai and Saudi markets is a reflection of more positive sentiment globally from investors.

Equity markets in Dubai, Saudi Arabia, and other key markets across Asia and Europe gained on Monday on the back of the UAE's Network International IPO on London, Aramco's strong profitability, soft Brexit expectations and stronger China factory data.
Dubai led the globally rally on Monday, jumping 2.4 per cent to 2,697 points and hit a four-month high after Emirates NBD's Network International initial public offering witnessed strong demand from investors.
Insurance stocks as well as blue-chips including Emirates NBD and Emaar Properties drove the Dubai market higher on Monday. Both the shares gained 4.5 per cent and four per cent, respectively.
"Today's gain is linked to Emirates NBD and its Network International IPO in London which is attracting interest from big firms and has reportedly attracted close to $300 million in a single transaction; so this is putting some perspective on the valuation," said Issam Kassabieh, senior financial analyst, Menacorp.
Dubai Financial Market General Index had gained four per cent in the first quarter of 2019. Kassabieh expects second quarter will see slower activity due to lack of any catalyst for the market.
"Honestly, I expect a slow second quarter for Dubai bourse because the holy month of Ramadan comes in with summer and I am not seeing fresh catalysts. I think we might have some movement in May as a result of first quarter results. But overall not much has been going on and I expect a slowdown in second quarter," said Kassabieh.
Going forward, Allied Investment Partners had said that the sentiments of global markets will influence the trading activity within the region but investors will focus on first quarter earnings to take directional positions post ex-dividend trading.
Jameel Ahmad, global head of currency strategy and market research at FXTM, said the leap forward in positive momentum for Dubai and Saudi markets today is a reflection of a broader and more positive sentiment globally from investors.
Ahmad added that stock markets in US, Europe and Asia traded higher on the back of improved economic data from China, which has helped ease some concerns over a global economic slowdown.
Wall Street stocks rose early Monday at the start of a week of major economic reports that kicked off with disappointing US retail sales. In early trading, the Dow Jones Industrial Average rose 232 points, or 0.9 per cent, to 26,156. The S&P 500 rose 0.8 per cent and the Nasdaq composite rose 0.9 per cent.
In Europe, London's FTSE-100 rose 0.6 per cent at 7,326.18 points, Frankfurt's DAX-30 climbed 1.1 per cent at 11,652.22 and Paris CAC-40 up 0.7 per cent at 5,389.42.
"This improved sentiment has had a knock-on effect on other emerging markets, which is why local markets in the GCC have received a boost," Ahmad of FXTM said.
Saudi Arabia's Tadawul gained 0.87 per cent to close at 8,896 points on Monday, lifted by Saudi Aramco's record $224 billion earnings in 2018.
While other regional markets ended in a negative territory. Abu Dhabi bourse lost 0.4 per cent to close at 5,055 points; Omani equities fell 0.57 per cent to 3,961 points; while Bahrain's Bourse plunged 0.93 per cent to end the day at 1,400 points.
The outlook, according to FTXM's Jameel Ahmad, for local GCC markets is that there will be a level of sensitivity over the coming quarter, along with global markets through to economic data releases across the global economies.
"Concerns over a slowdown in global growth are evident and this is something that has made financial markets anxious this year. Therefore, data releases in major economies and how they are perceived will provide the impetus to how stock markets react," he added.
Earlier in Asia, markets rose across the major markets, led by 2.6 per cent gain by Shanghai Composite Index, 1.4 per cent rise in Japan's Nikkei, 1.7 per cent increase in Hong Kong's Hang Seng and 1.3 per cent hike in South Korea's Kospi.
While India's Sensex gained 0.51 per cent, or 198.96 points on Monday to end the day at 38,871.87 points. The benchmark Sensex closed slightly below the 39,000-mark - after hitting an all-time high on the first day of the financial year 2019-20's trade. The BSE Sensex hit an all-time high of 39,115.57 along expected lines as the pivotal banking index on the NSE was consistently rising over sustained foreign institutional investments.
The Nifty ended 31.70 points or 0.27 per cent higher at 11,655.60.
Tata stocks dominated the gainers' pack on the Sensex. Tata Motors (DVR) and Tata Motors surged over seven per cent, while the Tata Steel jumped 2.66 per cent. Other top gainers included were Vedanta, up 2.86 per cent, followed by Bharti Airtel, 2.73 per cent.
- waheedabbas@khaleejtimes.com