Gulf markets to consolidate above chart supports
Egyptian stock exchange - YOUM7 (Archive)

DUBAI: Major Gulf stock markets look set to consolidate above technical support on Thursday as weak oil prices prevent any extended rally.

The Saudi index bounced from near chart support on its August low of 6,921 points on Wednesday, adding 2.0 percent to 7,128 points.

Dubai’s index dropped during the day to just above support at its August low of 3,241 points, before rebounding to close 0.5 percent higher at 3,316 points.

Those rises suggest the markets have established floors for now. But turnover in both markiets was much lower than it was during August’s recoveries, suggesting the markets are not turning strongly bullish.

Brent crude oil futures sank 3.4 percent to a two-month low below $46 a barrel overnight, though they have edged up to just above $46 in Asian trade on Thursday.

Vodafone Qatar reported a net loss for its second quarter of 113.6 million riyals ($31.20 million), compared with a loss of 53.5 million riyals in the prior-year period; the result missed an estimate by Beltone Financial, which had forecast a quarterly loss of 70 million riyals.

Egypt’s market may also have found at least a short-term bottom after its slide slowed on Wednesday following three days of steep falls.

But concern about a possible currency devaluation or interest rate hike have not disappeared. There is still great uncertainty about the central bank’s intentions towards the currency with some bankers believing authorities are preparing to float the pound – a step that could help to solve Egypt’s hard currency shortage in the long run, but would be risky in the short term.

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