SHAFAQNA – Gulf stock markets rebounded strongly on Thursday as world oil prices steadied after plumbing multi-year lows, calming investor jitters. The rebound in oil prices and a number of political statements fuelled what was a spectacular comeback in most Gulf markets.
Dubai Financial Market Index — which had been the region’s biggest loser — surged 13.0 percent, the biggest one-day rise ever, to close at 3,426.70 points.
All shares advanced, with many rising the maximum allowed 15 percent. Market leader Emaar Properties added 14.9 percent, while construction giant Arabtec and Emaar Malls both increased by 15 percent.
Dubai had shed a massive 32.6 percent since November 27, when the OPEC oil cartel decided to maintain output levels, intensifying the price slide.
However, the market still ended the week 4.7 lower.
On the Saudi bourse, the Arab world’s largest, the Tadawul All-Shares Index surged 8.9 percent to pass the 8,000-point psychological barrier and close at 8,320.55. While it ended higher for the second day in a row, it closed the week down 0.9 percent.
All 15 sectors increased, with the leading petrochemicals index surging 9.7 percent. Market leader chemicals giant SABIC rose 9.8 percent.
Market sentiment was further boosted by the Saudi government’s decision to tap into its huge fiscal reserves to maintain high spending, despite the fall in revenues resulting from the low oil price.
Abu Dhabi Securities Exchange was up 6.7 percent at 4,365.19 points on the back of solid performance by all sectors, especially real estate and banks. It ended the week down 3.1 percent.
Muscat Securities Exchange rose 3.7 percent to 5,684.68 points, while Kuwait Stock Exchange added 1.9 percent to reach 6,230.09 points
The tiny Bahrain bourse gained 0.6 percent. Qatar Exchange, the Gulf’s second largest, was closed for a national holiday.
Investor sentiment improved after oil prices rallied slightly on Wednesday, taking benchmark Brent crude for February delivery above the $60 mark.
Europe’s main stock markets surged Thursday following rallies in Tokyo and on Wall Street as dealers welcomed the outcome of the US Federal Reserve policy meeting.
The US central bank left in place market expectations that it may raise interest rates only in the middle of 2015, downplaying speculation that a hike might come earlier than that because of the strength of the US economy.
In oil deals, US benchmark West Texas Intermediate for January delivery jumped $1.76 to $58.23 a barrel.
Brent North Sea crude for February won $1.97 to $63.15 a barrel.