Asia Markets
Emirati Equities Close Mixed as US Inflation Takes Spotlight
United Arab Emirates indices failed to find direction on Wednesday as higher-than-expected US inflation data, driven by higher energy prices due to the continued closure of the Strait of Hormuz, weighed on sentiment.At the close of trading, the FTSE ADX General Index was little changed at 0.06% in the green, while the DFM General Index declined 0.41%."Tuesday saw headline US CPI inflation come in at 3.8% year-on-year for April. It was 2.4% before the war. That's a 140bp uplift, and it's not done. As it is, we're set to hit 4% in May. Core hits 3% down the line. A persistence to the war and we risk adding to that. Getting to 5% inflation is quite probable if it goes on and on. From here, we likely have another week of waiting and watching the war given the China summit distraction, with the Strait remaining shut tight," ING said.On the geopolitical front, US President Donald Trump, ahead of his visit to China, said he does not need China's assistance to end its conflict with Iran and that the war will be won "peacefully or otherwise," Reuters reported Tuesday."The Iran war is likely to be discussed between the two leaders, but we do not expect any changes in China's approach to the war. Trump goes to Beijing with few cards on the hand and to avoid a further loss of face in the war, Trump might not push for any concessions that China is unlikely to give," Danske Bank said in a note. "However, Xi will likely repeat the words by China's Foreign Minister that China is willing to play a 'greater role in restoring peace'.Zooming in at home, the corporate side of the region saw another wave of earnings reports. Abu Dhabi National Oil Co. For Distribution (ADX:ADNOCDIST), d/b/a Adnoc Distribution, and Abu Dhabi Ports Co. (ADX:ADPORTS), d/b/a AD Ports Group, both logged higher attributable profits for the first quarter and closed 1.32% and 0.46% in the green, respectively.In Dubai, stocks of Dubai Refreshment (DFM:DRC) closed flat, while United Foods Co. (DFM:UFC) ended 0.15% higher. Both Dubai-listed consumer goods companies recorded higher profits for the three months ended March 31.
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