Major Middle East stock markets look set to consolidate on Sunday with a firm bias thanks to positive short-term technical signals.
With Brent oil still languishing below $45 a barrel and a lack of positive corporate news, an extended rally by the Persian Gulf Arab bourses looks unlikely. Moderate trading volumes show many investors remain wary of the markets.
Uncertainty about what the Egyptian central bank will do to address the country’s foreign currency shortage continues to weigh on that market, Reuters reported.
The Saudi stock index, last at 7,034 points, has been rebounding in recent days from support on November’s two-year low of 6,828 points. It faces resistance on the November high of 7,161 points; any break would trigger a double bottom pointing to a larger rally.
Dubai, last at 3,273 points, triggered a minor double bottom formed by the November lows on Thursday; the target of that pattern is 3,327 points.
Egypt closed near its intra-day high for the past two trading days, a positive signal for the short term.
The decision of credit rating agency Standard & Poor’s to downgrade Oman’s sovereign debt on Friday was a reminder of the financial pressures faced by some Persian Gulf Arab oil exporters and could dampen Omani banks.
However, trading in that illiquid market has very little impact on other Persian Gulf Arab bourses.
Most Persian Gulf Arab stock markets edged up in early trade on Sunday, supported by positive short-term technical factors, though modest turnover suggested a major uptrend was not underway.
Dubai’s index added 0.5% to 3,289 points. It triggered a minor double bottom formed by the November lows on Thursday; the target of that pattern is 3,327 points.
Nine of the 10 most heavily traded Dubai stocks rose, with builder Arabtec, the most active stock, up 1.7%.
Qatar edged up 0.02% as Islamic bank Masraf Al Rayan gained 0.4%. Indexes in Kuwait and Oman also crept up in thin trade, despite the decision of credit rating agency Standard & Poor’s to downgrade Oman’s sovereign debt.
Abu Dhabi’s index edged down 0.2% but Dana Gas surged 4.9% after saying the British High Court, ruling in a longstanding payment dispute, had ordered the Kurdish regional government to pay Dana’s consortium $100 million within 14 days.
