Abu Dhabi’s main stock index rises to a record, even amid heightened tensions in the region, as the benchmark’s biggest member surged on hopes of foreign inflows.
The ADX General Index climbed 3.5% at the close on Sunday, after earlier gaining as much as 3.8%, boosted by gains for First Abu Dhabi Bank (FAB), the biggest lender in the United Arab Emirates. The stock surged 10%, the biggest jump in more than a year, ending at the highest level since July 2019. MSCI Inc last week announced a quarterly review that could trigger about $500 million in flows from abroad to the lender, according to Arqaam Capital.
Shares in Oman also gained while those in Dubai slid. Stock markets in Saudi Arabia, Qatar, Kuwait, Bahrain, Egypt and Israel were closed for holidays.
The rally in Abu Dhabi came despite rising tensions in the Middle East as clashes between Israelis and Palestinians escalated. Israel’s benchmark TA-35 index falls 0.5% last week and the broader TA-125 declined 0.6%, the first weekly retreat since March 25.
The Palestine Stock Exchange Al Quds Index closed 0.1% lower on Sunday, paring this year’s gain to 4.1%. The market was closed for most of last week due to a holiday, when clashes increased.
Positive earnings that have beaten expectations for some companies in the UAE are offsetting geopolitical risk for now, according to Joice Mathew, the head of equity research at United Securities in Muscat.
“Geopolitics risk is back into the regional markets,” he said, adding that markets should reflect that as trading resumes this week.