Dubai stocks gain most in Mideast as ECB spurs risk appetite
Dubai stocks advanced the most among Middle Eastern equities as the European Central Bank's monetary stimulus boosted demand for emerging-market assets, adding fuel to bullish sentiment in the emirate. The DFM General Index climbed 1.4 percent to 3,401.03, extending four weeks of gains, the longest streak since April. Emirates NBD PJSC, the emirate's biggest lender, added 4.6 percent to the highest level in three months. Saudi Arabia's Tadawul All Share Index rose 0.6 percent at 1:06 p.m. in Riyadh.
"The ECB moves were taken well," said Saleem Khokhar, the head of fund management and equities at the asset management group of National Bank of Abu Dhabi PJSC. "There's a positive global backdrop in general and Dubai has been in risk-on mode for a while. We're expecting this to continue."
ECB President Mario Draghi exceeded investors' expectations by cutting all three main interest rates and increasing monthly asset purchases, spurring investor demand for risky assets. Dubai stocks have been rallying after Brent crude prices climbed from the lowest level since 2003, lifting the emirate's equity index into a bull market last month. Other stock gauges in the six-nation Gulf Cooperation Council, home to about 30 percent of the world's oil, followed.
About 566 million shares traded on Dubai's benchmark, double the six-month average, according to data compiled by Bloomberg. The gauge's 14-day relative strength index was at 70, which to some technical analysts is a sign the measure is overbought and poised to decline.
Dubai Parks & Resorts PJSC, which is building a series of theme parks in the U.A.E., jumped 14 percent to the highest since it listed in December 2014. About 148 million shares changed hands, or almost 18 times the three-month daily average.