UAE markets rose on Thursday while Qatar’s measure falls for a fifth session. Dubai’s index climbs 0.4 per cent to finish at 1,570 points, rising from a two-week low.
Top trader Drake & Scull gains 1.2 per cent, Emaar Properties ends flat and courier Aramex climbs 1.5 per cent. Gulf markets lost ground this week as global growth concerns spooked local investors.
“There are signs of economic recovery in the UAE,” says Ali Adou, portfolio manager at The National Investor. Abu Dhabi’s index rises 0.2 per cent to 2,603 points, also easing away from a two-week low.
Financial markets recovered their poise Thursday, a day after investors were spooked by rising levels of discontent in Greece and Spain over upcoming austerity packages.
Though the mood in markets has improved modestly, investors remain concerned about developments in Europe, where Greece and Spain have witnessed violent protests against debt reduction measures they are due to announce this week.
In Greece, the leaders of the three parties that make up the coalition are meeting again to decide on more spending cuts that the country must impose to keep receiving vital rescue loans. The meeting is taking place a day after more than 50,000 anti-austerity protesters took to the streets of Athens.
Greater focus will probably center on Spain, where the government is due to unveil new austerity policies amid mounting concerns over the country’s economic future.
Recession-hit Spain has come under pressure to tap a bond-buying program from the European Central Bank that has been partly designed to keep a lid on the country’s borrowing costs. But the government has been reluctant to request the help for fear of the conditions attached.
That has unnerved markets, ending the recent weeks’ relative calm in markets.
“You have to admire European politicians for their consistent ability to be able to snatch defeat from the jaws of victory,” said Gary Jenkins, managing director of Swordfish Research.
Spain’s new austerity package, which is due to be unveiled toward the end of the European trading session, comes in the wake of a violent protest in Madrid and big falls in Spanish stocks.
Worries that the Spanish government is losing control continued to hurt the country’s markets. The main IBEX index in Madrid was down 0.5 per cent at 7,817 while the yield on the country’s 10-year bonds spiked up to 6 per cent, not far off levels that are considered unaffordable.