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Gulf Markets Rebound As Margin Selling Eases

Gulf Markets Rebound As Margin Selling Eases

Dubai’s index was down as much as 7.5 per cent in the morning on concerns of a possible escalation of Syria’s civil war.

Gulf markets bounce from early lows as a flurry of selling related to margin calls eases.

Markets plunged in early trade as a possible escalation of Syria’s civil war, with the United States threatening military action, prompted individual investors to dump stocks and take profits on the big gains posted earlier this year.

Margin calls forced Dubai’s index down as much as 7.5 per cent in the morning after its seven per cent slide on Tuesday.

But forced selling has eased with Dubai now up 0.2 per cent at 2,555 points, rebounding sharply from near technical support on its 100-day average at 2,342 points.

Saudi Arabia, which lost 2.1 per cent in early trade, is up 0.2 per cent.

“Some of these prices are coming to levels where bargain hunters might jump in,” says Amer Khan, fund manager at Shuaa Asset Management.

“Risk is still further removed from the UAE – and a lot of things look pretty attractive at where they sit right now, such as Abu Dhabi banks that hiked dividends and are looking at growth next year.

“If there’s no change to fundamentals, I would expect institutions to start picking positions – partly because they might have missed some of the rally and for rotation within the market.”

Brent crude oil prices have advanced 1.8 per cent to a six-month high of $116.37 a barrel in response to the Syrian news, extending Tuesday’s 3.3 per cent surge – a positive factor for Gulf petrochemical shares.

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