Stock markets in the United Arab Emirates closed higher on Friday after UAE central bank lowered interest rates by a quarter percentage point, in line with the U.S. Federal Reserve. The move sparked optimism for stronger economic growth and boosted investor confidence.
The Fed cut its policy rate by 25 basis points on Wednesday and indicated that more cuts would follow as it responded to signs of weakness in the job market.
The Fed’s stance holds implications for Gulf economies including UAE, where most currencies are pegged to the U.S. dollar.
Dubai’s main index jumped 0.7%, boosted by gains in heavyweight real state and industrial sector index with Emaar Development rising 4.9%, while Gulf Navigation Holding climbed 6.8%.
Dubai developer Emaar Properties jumped 1.1%, mirroring the previous session’s gains after the firm scrapped plans to sell any stake in its Indian subsidiary and said it is exploring potential joint ventures with major Indian companies, including the Adani Group.
Abu Dhbai’s benchmark index settled 0.3% higher, led by a 1.5% hike in Adnoc Gas and 3% jump in Emirates Telecommunications Group .
Abu Dhabi’s market still has room to perform, particularly following this week’s interest rate cut, according to Milad Azar, market analyst at XTB MENA. However, ongoing uncertainty around oil prices at current levels remains a potential risk to the market’s upward momentum.
Separately, the UAE economy is projected to grow 4.9% in 2025, up from a prior forecast of 4.4%, on higher oil production and strong growth in the non-hydrocarbon sector, the central bank said.
Abu Dhabi index recorded a 1.1% gain on a weekly basis, while Dubai logged a 0.1% dip - LSEG data
Oil prices - a key catalyst for Gulf’s financial market - was slightly down as demand concerns overshadowed US rate cut buoyancy.
Brent crude was down 0.1% to $67.47 a barrel by 1142 GMT.
--------------------------------- ABU DHABI rose 0.3% to 10,128 DUBAI up 0.7% to 6,023 ---------------------------------
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