Abu Dhabi, Dubai in­dices may see strong start af­ter oil rally

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Abu Dhabi and Dubai in­dices may wit­ness a strong start to the week buoyed by strong per­for­mance crude oil, which has been a ma­jor sen­ti­ment driver.

Af­ter a very volatile week, the Dubai Fi­nan­cial Mar­ket Gen­eral In­dex closed 4.03 per cent higher at 3,648.45 on Thurs­day, while the Abu Dhabi Se­cu­ri­ties Ex­change Gen­eral In­dex closed the ses­sion 3 per cent higher.

The rally was mainly led by prop­erty stocks like Emaar Prop­er­ties, Arabtec and Am­lak Fi­nance. Am­lak jumped more than 9 per cent, while Arabtec shares jumped more than 5 per cent in trade in Dubai. In Abu Dhabi, Al­dar Prop­er­ties closed 6.94 per cent higher.

Most of the Gulf economies de­pend heav­ily on crude oil for rev­enues for their bud­gets. On Fri­day, Brent crude closed 5.24 per cent higher, above the keen­ly­watched $50 per bar­rel mark. How­ever, most an­a­lysts ques­tion if the oil rally would sus­tain go­ing for­ward amid a sup­ply glut and fall­ing world de­mand. Oil prices have fallen more than 50 per cent since Septem­ber last year.

World oil prices roared back to $50 a bar­rel in the sec­ond day of a fre­netic short-cov­er­ing rally on Fri­day, with vi­o­lence in Ye­men, a storm in the US Gulf and re­fin­ery out­ages help­ing ex­tend the big­gest two-day rally in six years.

Oil had tum­bled in tan­dem with stocks over much of the past week, hit­ting 6-1/2-year lows be­low $40 a bar­rel as Chi­nese fi­nan­cial tu­mult stoked fears of slow­ing growth.

Oil ral­lied on Thurs­day as eq­ui­ties re­bounded, but on Fri­day oil kept push­ing higher even as eq­uity mar­kets were calm. Deal­ers said a hand­ful of emerg­ing risks fed oil's gains.

War­planes from a Saudi-led coali­tion con­tin­ued raids in Ye­men even as trop­i­cal storm Erika moved closer to Florida, prompt­ing wor­ries about off­shore oil and gas in­stal­la­tions. Brent, the global oil bench­mark, closed up $2.49, or 5 per cent, at $50.05, af­ter nearly reach­ing $51 a bar­rel. It gained 10 per cent on the week.

US crude's front-month con­tract snapped an eight-week los­ing streak, ris­ing $2.66, or 6.3 per cent, to set­tle at $45.22 a bar­rel. -

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