MIDEAST STOCKS-Saudi may test chart barrier, most markets to consolidate
The Saudi Arabian stock market
By

DUBAI: Saudi Arabia’s stock market may test technical resistance on Wednesday but most Middle Eastern bourses look set to consolidate in the absence of positive corporate news, and because of caution over Turkey-Russia tensions.

The Saudi index has turned technically short-term bullish in recent days; Tuesday’s 0.7 percent rise to 7,202 points triggered a minor double bottom formed by the November lows and pointing up to 7,461 points.

It faces immediate resistance on its 50-day average, which has capped the market since June; that resistance is now at 7,343 points.

But with oil prices still below $50 a barrel, uncertainty over the implications of Turkey’s downing of a Russian warplane, and a lack of positive corporate developments, there are few fundamental factors to push up Gulf stocks.

On Tuesday Kuwait’s dinar dropped in the forwards market to its lowest level against the U.S. dollar since 2009, because of tightening banking system liquidity due to low oil prices. The Saudi riyal slipped to its lowest forwards market level since 1999.

The dinar’s forwards market drop did not indicate any chance of depreciation in the spot market – Kuwait is better able to cope with cheap oil than most Gulf economies – but it underlined financial pressures being felt around the region.

Egypt’s stock index may remain weighed down by concern about the possibility of currency devaluation after last month’s bombing of a Russian airliner over Sinai hit Egyptian tourism revenues. The index, last at 6,321 points, has only minor technical support on last week’s low of 6,302 points.

Recommend to friends

Leave a comment