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05/07/2009 00:00 AST
Gulf Arab stocks have been seen edging lower in early trading on Sunday, following a slide in oil prices and a decline on the Saudi index the previous day.
Saudi Arabias benchmark slumped to a two-month low with a 2.4 per cent decline on Saturday and other Gulf markets are expected to retreat in the absence of positive catalysts.
"The markets will probably start weakly, but weve had some pretty sharp falls recently and so I would be surprised if we saw the same sort of falls as Saudi yesterday," says Ali Khan, managing director and head of brokerage at Arqaam Capital.
"Apart from Abu Dhabi, all Gulf markets are down over the past five trading days and so its not as if we have a lot of froth to give back."
Oil prices fell below $66 (Dh242) a barrel on Friday after worse-than-expected US unemployment data hardened views that economic weakness would sap energy demand.
The US jobless figures sent world stocks tumbling late Thursday, but Asian shares steadied the following day, with US markets closed for the holiday weekend.
"Gulf markets should see narrow range-bound trading until the second quarter results start to come out later this month," adds Khan.
Meanwhile, shares of Emaar Properties slumped in early trading, a day after announcing the closure of its Algerian office because of a lack of progress in what was slated to be $20 billion worth of projects.
Emaar fell 4.6 per cent. All active stocks on Dubais index also declined, dragging it down 2.9 per cent to 1,769 points. Deyaar dropped 5.1 per cent and Union Properties lost 5.3 per cent.
The Abu Dhabi Securities Exchange (ADX) index retreated as weakening global sentiment convinces local investors to sell.
RAK Properties fell 1.4 per cent and it accounts for more than half of all shares changing hands on the benchmark.
Dana Gas, Aldar Properties and Sorouh Real Estate all dropped more than 4 per cent as losers outnumber gainers 14 to two.
"Volumes are very low and todays fall is just a reaction to the declines on US markets over the weekend," says Chamel Sahmy, Beltone Financial regional senior sales trader.
"We might see an intraday rebound. Gulf stocks will continue to track global markets until the second quarter results come."
The index fell 0.9 per cent to 2,647 points. Its next support level is around 2,580 points, Sahmy adds.
Reuters
Ticker | Price | Volume |
---|---|---|
SABIC | 114.77 | 5,915,941 |
SAMBA | 26.98 | 1,138,683 |
STC | 83.41 | 257,644 |
DARALARKAN | 13.47 | 74,648,349 |
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