MIDEAST STOCKS-Gulf may be sluggish, Egypt may stay weak on FX worries
The Saudi Arabian stock market

DUBAI: Gulf stock markets look set to trade sluggishly on Tuesday because of soft global markets, while foreign exchange worries may continue to weigh on Egypt.

MSCI’s broadest index of Asia-Pacific shares outside Japan is 1.1 percent lower, with Brent oil still well below $48 a barrel.

The Saudi stock index climbed 1.3 percent to 7,105 points on Monday, bouncing from technical support at its August low of 6,921 points, but in the absence of positive economic or policy news, an extended rally may be difficult as long as concern remains about the impact of low oil prices.

Real estate sector earnings in the United Arab Emirates could buoy the sector there, however. Abu Dhabi’s Aldar Properties reported a 9.4 percent rise in third-quarter net profit to 634.3 million dirhams ($172.7 million); SICO Bahrain had forecast 490.7 million dirhams.

And Dubai’s DAMAC Properties reported a 45 percent rise in quarterly profit, partly because of land sales.

Egypt’s stock market may stay depressed by speculation about a possible currency devaluation or hike in local interest rates, after U.S. economic data suggested a U.S. rate hike is imminent, and after the Russian airliner crash in the Sinai threatened to slash Egyptian tourism revenues.

After state banks launched Egyptian pound savings certificates with a high 12.5 percent interest rate at the weekend, the market is unclear about the central bank’s intentions towards the currency and monetary policy.

The stock index <.EGX30 dropped 2.8 percent to 7,139 points on Monday, after a 2.6 percent slide on Sunday. It broke chart support on its October low and its next support is at the September low of 6,921 points.

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