UAE markets rebound on hopes Iran war may end

UAE markets rebounded on Tuesday, making their first advance since the start of the US-Israeli war on Iran after US President Donald Trump claimed the conflict may soon end.

Trump’s remarks a day earlier, in which he said he would ensure the Strait of Hormuz would re-open to marine traffic, also sparked a sharp drop in oil prices. One-fifth of global crude and liquefied natural gas supplies transit through the narrow channel, which marks the entrance to the Gulf.

“UAE markets rebounded on some positive signals that the war may come to an end soon,” said Sanat Sachar, a portfolio manager at Azimut Middle East in Dubai.

The emirate’s index rose 2 percent to 5,866 points, rebounding from Monday’s eight-month low and trimming its losses since the outbreak of the Iran war on February 28 to 9.8 percent.

Abu Dhabi’s benchmark rose 1.4 percent to 9,997 points. It is down 4.4 percent in the five trading sessions following the US-Israeli strikes on Iran that led Tehran to retaliate, effectively closing the Strait and striking civilian and military targets in the Gulf and beyond.

“Most blue-chips are down 15-20 percent since the conflict started, so the economic impact of the war is now more or less priced in – from here onwards, it depends on how the war pans out,” said Sachar. “If the situation improves, there will be a further market rebound, but if things worsen the market will resume its decline.”

In Dubai, top bank Emirates NBD rose 8.3 percent and Dubai Islamic Bank climbed 4.8 percent, although the biggest gainers were small- and mid-cap stocks.

Market bellwether Emaar Properties fell 4.1 percent, declining for a fifth straight session as passive funds and international investors reduced their holdings. It has fallen 21 percent during this period.

“There’s a huge backlog of sell orders that has to be absorbed by retail investors, hedge funds and local asset managers,” said Sachar.

Saudi Arabia’s index, which hit a two-week high on Sunday before declining on Monday, rebounded again on Tuesday as 25 of 30 industry sub-indexes advanced. The main benchmark was up 0.9 percent at 10,930 points at 1228 GMT.

Qatar’s measure rose 2.5 percent, rebounding from Monday’s eight-month low as gainers outnumbered losers 46 to eight. Qatar National Bank, Doha’s largest listed company, surged 4.3 percent and was the most traded stock.