Bank stocks take Dubai in­dex lower

The National - News - - BUSINESS IN DEPTH -

The Dubai Fi­nan­cial Mar­ket Gen­eral In­dex fell 0.3 per cent to close at 2,746.93 in Dubai on Thurs­day. The move fol­lows the pre­vi­ous ses­sion’s in­crease of 0.5 per cent.

Bank stocks led the mar­ket lower, as six of nine sec­tors lost; 14 of 37 shares fell, while eight rose. Emaar Prop­er­ties con­trib­uted the most to the de­cline, fall­ing 0.9 per cent, while Na­tional Ce­ment Com­pany had the largest drop, fall­ing 4.2 per cent.

Mean­while in emerg­ing mar­kets Brazil’s real cur­rency scaled 11-week peaks as the coun­try’s cen­tral bank sounded less dovish about fu­ture rate cuts, while most other Latin Amer­i­can cur­ren­cies inched higher against a dol­lar in the dol­drums.

The dol­lar fell 0.4 per cent against a bas­ket of six ma­jor ri­vals af­ter the US Fed­eral Re­serve cut in­ter­est rates as ex­pected and sig­nalled ad­di­tional trims are un­likely. But the lack of an ex­plicit sig­nal that the bank is done with eas­ing for now was per­ceived to be less hawk­ish than ex­pected.

“By sug­gest­ing that mar­kets should not reprice the path of mone­tary pol­icy much even if in­fla­tion were to start mov­ing higher would sug­gest a more pro­longed pe­riod of lower real rates, which ought to be bear­ish for USD,” Mor­gan Stan­ley an­a­lysts said in a note.

Colom­bia’s peso rose for a fourth ses­sion in five, while Brazil’s real rose as much as 0.7 per cent. Brazil’s cen­tral bank cut the bench­mark in­ter­est rate to an all-time low of 5 per cent as ex­pected on Wed­nes­day, but sig­nalled that fur­ther eas­ing may be less ag­gres­sive than it has been in re­cent months, de­spite in­fla­tion run­ning well be­low tar­get.

Mex­ico’s peso slipped 0.2 per cent a day af­ter data showed the econ­omy crawled for­ward in the third quar­ter from the pre­vi­ous three-month pe­riod, fall­ing short of fore­casts and pro­long­ing its tepid start un­der Pres­i­dent Andres Manuel Lopez Obrador.

“The mar­ket took this data as indi­cat­ing that the like­li­hood of a 50 ba­sis point cut in the up­com­ing Banx­ico meet­ing must be in­creas­ing, as front end rates kept fall­ing,” an­a­lysts at Cit­i­group said.

“But with the Fed also sig­nal­ing a pause, we doubt that Banx­ico is cur­rently in the mind­set of a 50bp cut, even though there is a clear will­ing­ness to cut more than the Fed.”

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