Dubai's stock index tumbled 7.3% on Tuesday and was down 28% this month
Gulf stock markets were relatively calm in early trade on Wednesday after falling sharply in the previous session when Brent crude oil fell below $60 per barrel.
Dubai's stock index, which tumbled 7.3 percent on Tuesday and was down 28 percent this month, rose 0.7 percent as half of traded stocks gained.
Local investors hope that foreigners looking to exit the market before the end of the year have already done so and that selling pressure will now subside, said Sanyalak Manibhandu, manager of research at NBAD Securities in Abu Dhabi.
Also, some may be betting that money from Emaar Properties' AED9 billion ($2.5 billion) dividend payout on December 23 will be partly reinvested on the market.
"Valuations are now very attractive compared to what they were early in the year," Manibhandu said. However, "going forward, for sustainability you need to see crude prices not fall much from where they are now."
Abu Dhabi's index rose 2.6 percent and Oman's bourse edged up 0.2 percent. Qatar inched up 0.1 percent and Kuwait edged down 0.4 percent.
It must be difficult to be a writer on the Dubai markets. Every headline is either contradicted the same day or the next. Its up, its down, its stabilised, its plummeted, its stabilised.
Nothing stabilises in one trading day. We all know there is an underlying expectation that Oil will drop to $40/Brl. Its as much been said by 2 Oil Ministers already (UAE & Kuwait).
There is a lot more volatility to come. Those who think we are at the bottom have seen nothing yet. The worst is definitely yet to come.
There is too much 'dirt' to be washed out of the system worldwide for the markets to stabilise. No market or economy is 'protected'.