UAE equity markets ended the week on a positive note, supported by renewed investor confidence after the Central Bank of the UAE reduced its base rate in line with the US Federal Reserve. Market participants welcomed the 25 basis point cut, which lowered the overnight deposit facility rate to 3.65%, while borrowing costs for short-term liquidity remained set at 50 basis points above the base rate.
Commenting on market performance, Vijay Valecha, Chief Investment Officer at Century Financial, said, “U.A.E. equities ended the week higher. Markets reacted positively to the Central Bank of the United Arab Emirates’ decision to reduce its base rate.” He added that the policy move reinforced optimism across both Dubai and Abu Dhabi markets.
Dubai Market Regains Momentum
The Dubai Financial Market General Index (DFMGI) posted a strong weekly performance. According to Valecha, “The DFM General Index closed higher, reclaiming its October highs near $6100. The index has closed at the AED 6,097.5 level, ending the week with a gain of almost 2%. This brings the year-to-date gains to nearly 18%.”
Sectoral performance reflected broad-based strength. “The consumer discretionary sector increased by 6.4%,” Valecha noted, adding that materials, communication services, industrials, and financials also advanced between 2.5% and 2.8%, highlighting improving market breadth. Among individual stocks, Talabat Holding, Amanat Holdings, Dubai Investments, and Emirates NBD led gains, while Takaful Emarat Insurance and Sukoon Takaful lagged, considering Bloomberg data.
On the technical front, Valecha explained: “The index is trading above the 50-day SMA at AED 5,976.6 and the 200-day SMA at AED 5,696.1. The 14-period RSI is trending above 50, indicating strong bullish momentum.” He added that a breakout above AED 6,110 could push the index toward its 52-week high of AED 6,235.8, while support lies at AED 5,950 and AED 5,900.
ADX Tracks Rate-Cut Optimism
Abu Dhabi’s benchmark also benefited from the supportive policy backdrop. The FTSE ADX General Index rose 0.38% for the week, closing at AED 9,988.7. Valecha attributed the gains to the rate cut, noting that “the up move was driven by the UAE Central Bank cutting rates in line with the Fed.”
Sector performance on ADX was mixed, with utilities and industrials gaining 2.91% and 2.62%, respectively, while healthcare and consumer staples underperformed. Alpha Dhabi Holding, Aldar Properties, Abu Dhabi National Energy Company, and First Abu Dhabi Bank were among the top gainers, while Abu Dhabi Commercial Bank and ADNOC Drilling lagged.
From a technical perspective, Valecha observed: “The index is trading above the 9 and 21 SMA on the daily timeframe.” He highlighted immediate support at AED 9,900, followed by the 200-day SMA at AED 9,841, while resistance stands at the 100-day SMA near AED 10,087, and then AED 10,149.
With no major earnings releases expected in the near term, market direction is likely to remain closely tied to global macro cues and interest-rate expectations, as investors assess the sustainability of the current rally across UAE equities.
