European equities give UAE investors courage

Shares in the UAE climbed, even though oil prices dropped for the first time since last week’s landmark production cut deal.

Shares in the UAE shrugged off a dip in oil prices on Tuesday, as investors drew courage from the resilience of European equities.

Oil prices dropped for the first time since last week’s landmark production cut deal, falling by 1 per cent to US$54.35 per barrel in early trading before recovering to $54.76 per barrel in midafternoon.

Investors in the UAE were undeterred, however, and took comfort from the quick rebound on Monday of European equities following the resignation of Matteo Renzi, the Italian prime minister.

“There was fear that Renzi’s resignation was going to lead to a collapse of European prices, but there was a very quick rebound in prices on Monday,” said Sanyalak Manibhandu, a research manager at NBAD Securities. “Much of the gain we saw here in UAE shares was in response to that.”

Headline indexes in Abu Dhabi and Dubai both closed up by about 1.3 per cent on Tuesday, as investors piled into banking stocks ahead of annual dividend announcements.

DIB led gains in Dubai, closing up by 4.3 per cent at a three- month high of Dh5.53.

Emaar Properties and Union Properties were among the other big-name gainers, rising 0.9 per cent and 5 per cent respectively.

Shares in Drake & Scull International fell 0.4 per cent to 51.9 fils, after the construction firm was reported to be close to selling off Dh300 million worth of land on Dubai’s Palm Jumeirah to pay down debt.

FGB and ADCB led gains in Abu Dhabi, rising 1.7 per cent and 3.6 per cent respectively.

Follow The National's Business section on Twitter