Investors buy beaten-down property-related stocks as stock market recovers from slump in early trading
Dubai's bourse made a spectacular turnaround on Tuesday and closed up 3.2 percent, after tumbling as much as 5.4 percent during the session.
The benchmark closed at 4,068 points, bouncing back above its 200-day average at 3,866 points, which is seen as an important technical indicator. Earlier in the day the index dropped below the 200-day average for the first time since December 2012, when a bull market was just about to begin.
Blue chip Emaar Properties jumped 5.8 percent while construction firm Arabtec, which earlier fell its 10 percent daily limit, surged 10.3 percent.
At 8.90 dirhams, Emaar is now 21 percent below 14 analysts' median target price of 10.80 dirhams. In May, the stock peaked at 11.10 dirhams.
Shares in Arabtec had previously plunged 67 percent, dragging down the entire Dubai market, as margin calls issued by brokers to leveraged retail investors exacerbated a decline triggered by management turmoil at the company.
Market players said the bulk of margin calls in Arabtec had probably been filled now, easing pressure on the stock, while rumours that a government-related entity would buy a large stake owned by its former chief executive helped drive up the price.
After trading closed, Arabtec said in a brief statement it would hold a news conference on Wednesday to answer investors' questions and address rumours about the firm.
Dubai's recovery helped Abu Dhabi, where the main index rose 0.6 percent. Abu Dhabi Commercial Bank was the main support, jumping 7.7 percent to 7.60 dirhams. The stock, which traded above analysts' median target price of 8.55 dirhams in May, is now 13 percent below it.