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GCC, Asian markets rebound

Most of the GCC and Asian equity markets bounced back on Monday as the impact of the coronavirus eased, following last week's tumble that wiped out $7 trillion from the markets worldwide.
The markets were propped up by central banks' statements about supporting the economies through different means. The US Federal Reserve stated on the weekend that it was ready to help the economy if needed. Therefore, investors are now expecting the Fed to cut rates at its next policy meeting in mid-March. Moreover, the Bank of Japan's governor, Haruhiko Kuroda, said that the central bank will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases. Both the factors were key in lifting the markets on Monday.
Recovery in the Gulf markets was led by Kuwait and Dubai, which jumped 6.3 per cent and 2.5 per cent, respectively.
In Dubai, four shares ended in the red while 31 scrips gained. Air Arabia, Damac Properties, Ajman Bank, Amlak, and Salama all gained over five per cent on Monday. At Abu Dhabi Securities Exchange, Dana Gas, Waha Capital, Agthia, Methaq, and Abu Dhabi Islamic Bank were the top gainers, rising between over four to six per cent.
Dana Gas on Monday said its growth plan and operations remain unaffected by the coronavirus. However, precautionary measures and contingency plans have already been put in place to safeguard personal and assets.
Among other regional bourses, Abu Dhabi gained 0.8 per cent, Saudi Arabia's Tadawul jumped 1.9 per cent and Bahrain rose 2.3 per cent. Qatar and Omani stock exchanges bucked the trend, losing 2.9 per cent and 0.01 per cent.
Iyad Abu Hweij, managing director at Allied Investment Partners, said that, going forward, global equity markets will continue to remain under pressure.
"However, a technical pull back can't be ruled out in the coming week. Investors might not be able to time the bottom and instead should focus on maintaining a disciplined approach to withstand the rising uncertainty. For the regional markets, trading activity during the coming weeks will be dominated by sentiments in the global markets," said Abu Hweij.
Simon Ballard, chief economist at First Abu Dhabi Bank, said better late than never, central banks have again clearly been bullied by the markets into conveying a willingness to ease, which is creating a degree of relief in risk assets Monday morning.
"After the rout of last week, the uptick is being driven by the belief that central banks will have our backs going forward, after the Bank of Japan released a statement saying that it 'will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases," said Simon Ballard, chief economist at First Abu Dhabi Bank.
Shares in most of the Asian markets also rebounded as factory output data showed some progress in China after weeks of disruption due to coronavirus.
Japan's Nikkei 225 index gained one per cent to 21,344.08, while the Shanghai Composite index rose 3.2 per cent to 2,970.93. The benchmark for the smaller exchange, in Shenzhen, jumped 3.8 per cent, while South Korea's Kospi climbed 0.8 per cent to 2,002.51. The Hang Seng in Hong Kong climbed 0.6 per cent to 26,291.68.
India's Sensex gave up early gains, losing 0.4 per cent to 38,159.11. The index was in a positive territory most of the day but the news of first coronavirus case in New Delhi pushed the markets to negative territory. The Indian rupee also pared all its initial gains and settled 50 paise down at 72.74 against the US dollar (19.82 versus the UAE dirham) on Monday after two fresh cases of coronavirus were detected in India.
Shares fell in Australia, where the S&P ASX/200 lost 0.8 per cent to 6,391.50 after authorities confirmed the country's first case of domestic transmission of the virus.
In Europe, Britain's FTSE 100 jumped 1.4 per cent to 6,672.05 and the CAC 40 in Paris added 0.8 per cent to 5,353.45 in mid-day trade. Germany's DAX edged 0.3 per cent higher to 11,918.30
- waheedabbas@khaleejtimes.com