DUBAI // Abu Dhabi stocks advanced to an 11-month high yesterday as oil hit US$76 a barrel and after an overnight rally in the US saw the Dow break the 10,000 barrier for the first time this year. Most Gulf markets rose following US stock market gains on Wednesday that sent the Dow Jones Industrial Average Index above 10,000 for the first time in a year on better than estimated earnings at JPMorgan Chase and Intel.
The rally boosted investor confidence that the global economy is slowly emerging from recession. "Higher oil prices and gains in international markets are working in favour of regional markets," said Ayman el Saheb, the director of operations at Darahem Financial Brokerage in Dubai. "This, coupled with announcements by local officials that the worst is over for the regional economies, is pushing the markets up."
Dubai and Kuwait were the only two bourses that posted slight losses on profit-taking yesterday. The Dubai Financial Market General Index lost 0.4 per cent after gaining about 3 per cent on Wednesday. Traders said local markets would continue to advance as investors looked forward to improved earnings. "Nothing goes up in a straight line, but the market has seen additional liquidity and volatility over the summer," said Ali Khan, the managing director at Arqaam Capital in Dubai. "Ever improving international barometers like the S&P 500 and DJIA are also helping the investor mindset and already there is short-term risk appetite visible in the market."
Crude oil prices also jumped to a one-year high of more than $76 a barrel yesterday. The Abu Dhabi Securities Exchange General Index extended its rally from Wednesday and closed 0.3 per cent higher, helped by gains in telecommunications and construction stocks. Elsewhere in the region, Qatar stocks rose 0.7 per cent, the Muscat market gained 0.6 per cent and Bahrain 0.1 per cent, while Kuwait posted a slight loss of 0.06 per cent.