Middle East markets mount rally
But traders warn gains could prove temporary.
July 6, 2010 9:09 by Samuel Potter
Middle East markets rose on Monday as a slight improvement in Asian stocks drew in regional bargain hunters following recent declines, but traders warn the gains could prove temporary.
Six of the eight benchmarks advanced, with Qatar the biggest gainer, climbing 0.9 percent to 6,825 points. Kuwait slipped to a new five-year low as confusion over new trading rules and downbeat expectations for quarterly earnings pushed investors to exit.
Saudi Arabia Tadawul All-Share Index (TASI) rose 0.46 percent to 6,030.32 points, ending a six-session losing streak. Steady oil prices bolstered petrochemicals stocks, with Saudi Basic Industries Corp. (SABIC) climbing 1.8 percent to SR84.50.
The sector activity for the day was mostly positive with 12 out of 15 sectors closing with gains ranging from 0.04 percent by the Telecommunication & Information Technology sector to 2.37 percent by the Building and Construction sector. On the other hand the losses were seen in 3 sectors namely Hotel and Tourism, Real Estate Development and Banks and Financial Services Sector with respective losses of 0.04 percent, 0.09 percent and 0.19 percent. The overall market breadth for the day was positive with 89 advancers against 33 decliners giving it an AD ratio of 2.69, the Financial Transaction House (FTH) said in its daily market commentary.
Kuwait’s index slipped 0.01 percent to 6,320 points, its lowest finish since November 2004. More selling pressure is likely, with investors unsure about new trading rules brought in ahead of the launch of the country’s first market regulator.
National Bank of Kuwait (NBK) rose 1.8 percent and Wataniya added 1.2 percent.
Bank Dhofar climbed 1.1 percent, helping Oman’s index rise for a third day. The Omani index rose 0.4 percent to 6,104 points.
Dubai’s index rose for a second session in three as volumes slumped to a seven-month low. The index rose 0.3 percent to 1,472 points. The Abu Dhabi index gained 0.2 percent to 2,521 points.
Drake & Scull rose 2.3 percent after winning a $120 million contract in Jeddah.
The Bahraini index edged up 0.03 percent to 1,362 points.