UAE, GCC Stock Markets Rebound, Jolted by Oil Prices Recovery

Published March 10th, 2020 - 09:28 GMT
UAE, GCC Stock Markets Rebound, Jolted by Oil Prices Recovery
US. Brent crude futures rose $2.51, or 7.3 percent. (Shuttrstock)
Highlights
Oil prices also bounced back on Tuesday morning after crashing 31 per cent on the previous day.

The UAE and GCC stock markets bounced back on Tuesday morning after massive selloff witnessed over the past few days, helped by a recovery in oil price and hopes of a stimulus package.

Dubai Financial Market General Index gained 5.2 percent while Abu Dhabi Securities Exchange bounced back with a 4.6 percent surge on Tuesday morning. Saudi Arabia's Tadawul index was also up by 5.4 percent within a few minutes of opening trade. Boursa Kuwait jumped 4.8 percent.

Oman's Muscat Securities Market was also up 0.34 percent while Bahrain and Qatar indexes rose by 1.1 percent and 2.9 percent, respectively, on Tuesday morning.

Crude prices also bounced back on Tuesday morning after crashing 31 percent on the previous day, rising by more than seven percent on the hope of economic stimulus from the US. Brent crude futures rose $2.51, or 7.3 percent, to $36.87 a barrel by 0418 GMT, while US.West Texas Intermediate (WTI) crude gained $2.15, or 6.9 percent, to $33.28 a barrel.

US President Donald Trump has announced that he will take a "major" step to help the US economy avoid the impact of coronavirus outbreak. The US president will also discuss payroll tax cut with the Republications.

"The stock market rally has always been a key proof of success for Donald Trump, and what has been happening in the market recently may pull the carpet from under his feet during the critical year of the presidential election. So, if the Federal Reserve's (Fed) emergency action couldn't give the market a jolt, then it wouldn't be a surprise to see Donald Trump stepping in with massive fiscal measures to save the year," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The GCC bourses lost around 15 percent during the previous two sessions. On a free-float basis, investor wealth in the UAE and GCC regions declined by Dh160 billion on Monday - taking the total to Dh310 billion in the first two days of trading this week.

Investors in Dubai and Abu Dhabi lost Dh10 billion ($2.62bn) and Dh16.54 billion ($4.47bn), respectively.  While Saudi investors lost Dh72.5 billion ($19.75bn), Kuwaitis lost Dh31.2 billion ($8.5bn) and Qataris lost Dh24.22 billion ($6.6bn), according to Century Financial data.


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