Thursday 24 May 2018

Gulf markets slip as global gloom weighs

Dubai, June 24, 2013

Regional bourses fell on Monday as renewed selling pressure on global shares sparked a profit-taking spree, extending losses since the US Federal Reserve said it would cut back a stimulus programme.
The US central bank's plans and fears Chinese policy may be tightening sent the dollar sharply higher on Monday, while world shares extended last week's dismal performance.
Saudi Arabia's index, the largest regional market, fell 0.8 percent, cutting 2013 gains to 10.3 percent.
"I'm negative on Saudi for the summer months plus, technically, the market is not looking good - volumes are not supporting it," said Farooq Waheed, senior portfolio manager at Riyad Capital.
Saudi companies will kick off earnings season from mid-July, the market's only near-term catalyst. Waheed said second-quarter earnings expectations for large-caps are not very positive.
Indices for the heavyweight petrochemical and banking sectors fell 0.9 and 1.1 percent respectively.
Long-term investors in Gulf markets however are holding positions in selected stocks as dividend yields are attractive compared to other regions, analysts said.
In the United Arab Emirates, Dubai's index fell 1.9 percent to 2,256 points, its third consecutive substantial drop, but it is still up 39 percent year-to-date.
Sunday's drop triggered a bearish right triangle formed by the highs and lows since early June, signalling the end of the rally that began in early April. The index is now testing minor support on the 38.2 percent retracement of the rally, but the triangle points lower, to near the 2,100-point area.
"We're heading into a corrective phase, which could go on for months," said Bruce Powers, technical analyst and corporate advisor at Orpheus Capital. "The more a rally is extended, the greater the chance of a sharp fall and this is happening now."
Powers said the dip, at a time when global markets are under pressure, is not a surprise and the next support level is at 2,038 points, followed by 1,929. "Given the acceleration in the drop, there's a pretty good chance we will hit the 1,950 area."
In Abu Dhabi, the benchmark dropped 1.1 percent, trimming its 2013 gains to 34 percent.
Weaker trading volumes helped UAE markets outperform the drop on more liquid emerging market stocks in recent weeks.
The emerging market index slumped 14.1 percent between May 22-June 21, when Fed chairman Ben Bernanke fuelled expectations it would scale back its bond-buying programme.
In contrast, Abu Dhabi and Dubai gained 3.7 and 1.6 percent respectively in the same period.
Elsewhere, Doha's index retreated 0.6 percent, its seventh decline in the last eight sessions since the market hit a 57-month high.
Kuwait's benchmark retreated 1.6 percent, while Oman's bourse lost 0.9 percent.
SAUDI ARABIA: The index retreated 0.8 percent to 7,501 points.
DUBAI: The index lost 1.9 percent to 2,256 points.
ABU DHABI: The index fell 1.1 percent to 3,527 points.
QATAR: The index slipped 0.6 percent to 9,178 points.
KUWAIT: The index fell 1.6 percent to 7,943 points.
OMAN: The index declined 0.9 percent to 6,351 points.
EGYPT: The index eased 0.03 percent to 4,523 points.
BAHRAIN: The index declined 0.4 percent to 1,198 points. - Reuters

Tags: stocks | Gulf Markets |

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