UAE stock markets had their best day in weeks on Thursday after the US Federal Reserve raised expectations of a long-awaited interest rate rise in the coming months.
“As expected, the Fed dropped its pledge to be “patient” before raising rates thus creating the opportunity to move for the first time in nearly a decade,” said Keith Wade, the chief economist at Schroders.
However, he noted that the Fed Open Market Committee had cut its forecasts for growth, inflation and future interest rates, meaning that its first rate rise would likely come a few months later than previously envisaged.
“In short, the Fed sees more slack and less wage pressure than before, meaning that it can take its time in making its first move,” he said, predicting that the first rate rise would come around September.
The Dubai Financial Market General Index posted its highest one-day rise since early February, closing up 1.9 per cent at 3,473.42.
The Abu Dhabi Securities Exchange General Index jumped 1.3 per cent to 4,337.63. The day’s gains capped off a torrid week for both indexes, which experienced sharp falls prompted by falling oil prices.
Dubai, however, ended down 6.3 per cent for the week, while Abu Dhabi closed down 3.2 per cent.
Dubai investors piled back into Emaar Properties, after The Dubai Mall’s developer categorically denied rumours that its chairman, Mohamed Alabbar, intended to leave the company.
Shares in the DFM, the listed bourse operator, rose 5.8 per cent to Dh1.62, with Deyaar Development, Emaar Malls Group and Union Properties all rising by more than 2.5 per cent each on the day.
In the capital, the financial service sector was the main beneficiary of the rebound. FGB led gains, surging 3.79 per cent to Dh13.70, followed by ADCB, which ended up 3.09 per cent at Dh6.
Aldar Properties was the other main gainer, rallying 2.67 per cent to Dh2.31.
jeverington@thenational.ae