DFM gains exceed Dhs24 billion during current month’s trading

Dubai Financial Market (DFM) strengthened its gains during the current month’s trading, with its market capitalisation increasing by over Dhs24 billion, supported by the gains of bank and utility stocks.

The market capitalisation rose from Dhs687.5 billion at the end of the previous year to over Dhs711.5 billion by the end of today’s session. Additionally, the market capitalisation of the Abu Dhabi Securities Exchange (ADX) reached around Dhs2.9 trillion, bringing the combined market capitalisation of both markets to approximately Dhs3.615 trillion.

Stocks attracted liquidity in January, totaling around Dhs33.7 billion, distributed with Dhs25.8 billion in the Abu Dhabi market and Dhs7.9 billion in the Dubai market. Trading involved over 8.83 billion shares in more than 498,700 transactions.

The general index of the DFM increased by 2.69% in January, equivalent to more than 109 points, closing at 4169.08 points compared to its year-end level of 4059.8 points.

Dubai’s market gains were driven by the rise of the telecommunications sector index by 8.86%, the financial sector by 6.06%, industry by 3.25%, and services by 1.07%.

At the end of the month, the Abu Dhabi market index, ‘FADX 15,’ closed at 9330.92 points, while the general Abu Dhabi market index, ‘FADGI’, closed at 9508.32 points.

The tech-heavy Nasdaq tumbled to more than a week low on Wednesday, as Alphabet’s projections for rising AI costs dented most megacap and chip stocks ahead of a crucial US policy decision expected later in the day.

Alphabet slumped 6.9%, pushing the S&P 500 communication services sector 3.5% lower, after the company reported holiday-season advertising sales below expectations and projected higher spending this year on items such as servers to power artificial intelligence.

Microsoft also forecast higher costs to develop new artificial-intelligence features, but delivered upbeat quarterly results. The stock was down 0.5% in choppy trade.

Even though the tech pioneers talked up how customers are lapping up their generative AI-powered products, mounting development costs for the cutting-edge features irked investors hoping for a big boost to sales from the new technology.

“Definitely costs are playing on their minds, but also a lot of this is: will AI actually translate into profits and justify the valuations that these stocks have had or will AI become a fad,” said Adam Sarhan, chief executive of 50 Park Investments.

The tech results and forecasts, coupled with Tesla’s growth warning last week, have prompted renewed focus on risks from the outsized weighting of the megacap names in the S&P 500 that have collectively pushed the benchmark index to record highs in recent weeks.

Apple, Meta Platforms and Amazon.com , set to deliver their earnings on Thursday, fell between 1.6% and 2.3%.

Advanced Micro Devices dropped 2.7%, as the chipmaker’s first-quarter revenue forecast and a boosted projection for AI processors failed to meet expectations.

Other chip stocks Nvidia, Intel, Broadcom and Marvell Technology declined between 0.2% and 1.8%.

Supporting the blue-chip Dow, Boeing rose 3.6% following upbeat results, though the plane maker delayed annual financial or delivery forecast.

The focus was now on the Federal Reserve’s first monetary policy decision for this year, at 2 p.m. ET. The Fed is widely expected to hold rates steady.

Any hints on when the first rate cut might arrive could also help determine the fate of the heavily weighted tech and tech-adjacent stocks.

The ADP National Employment report showed private payrolls rose by 107,000 in January, far less than the estimated 145,000 increment, a day after the JOLTS report reflected an unexpected rise in December job openings.

At 9:48 a.m. ET, the Dow Jones Industrial Average was up 56.62 points, or 0.15%, at 38,523.93, the S&P 500 was down 33.37 points, or 0.68%, at 4,891.60, and the Nasdaq Composite was down 205.83 points, or 1.33%, at 15,304.07.

Among others, Tesla shed 0.8% after a Delaware judge tossed out Elon Musk’s record-breaking $56 billion Tesla pay package.

Thermo Fisher Scientific dropped 2.9% after the medical equipment maker forecast annual profit below estimates.

Declining issues outnumbered advancers for a 1.03-to-1 ratio on the NYSE and a 1.18-to-1 ratio on the Nasdaq.

The S&P index recorded 54 new 52-week highs and one new low, while the Nasdaq recorded 38 new highs and 52 new lows

Euro zone government bonds rallied sharply on Wednesday, sending German yields on their biggest one-day slide in four months, after soft data from both sides of the Atlantic reinforced the view that interest rates are on the verge of dropping.

U.S. data on wage growth and private-sector employment both undershot expectations, which supercharged a rally in short-dated Treasuries that fed into a fresh burst lower for European yields in afternoon trading.

The benchmark 10-year Bund yield, which is heading for its first monthly rise since September, dropped as much as 11.9 basis points, its largest daily fall since late September.

Agencies