Stock markets across the world witnessed massive selling during the week gone by amid concerns over steep valuations and a tech bubble burst in the US, however by the end of the week, a partial rebound was observed. The benchmarks are now aligning to market wide investor sentiment and reacting sharply on any negative global cues. Sectors that seemingly withstood the market crash and launched into a massive March-September rally are now finally experiencing selling pressure.
Taking into account past data, much of this is nothing new, as cases were already rising, vaccines were still far from reality and the economy never stepped out of the slow lane. The only change is the liquidity tap – once the only driving factor for markets but now showing signs of drying up. The possibility of a stimulus package by the US government is picking pace and it remains to be seen if this becomes a reality ahead of the November elections. If so, analysts say it could turn out to be a shot in the arm for the markets that are looking for fresh triggers to move higher. While major stock markets in the Gulf eked out gains on Sunday, UAE bourses had a day of mixed trading, wherein investors were largely on the fence about macroeconomic prospects surrounding the ongoing crisis. Dubai’s main share index slipped 0.3 per cent, while the Abu Dhabi index was up 0.4 per cent, led by a 0.7 per cent gain in the country’s largest lender, First Abu Dhabi Bank.