MSM displays consolidation trend

08/10/2015 07:37 AST

Along with its peers in the region and elsewhere in the world, the Muscat Securities Market witnessed a consolidating trend in its trading on Wednesday. The benchmark MSM 30 Index rose 0.49 per cent to reach 5,860.470 points in a trading session marked by range-bound activity.

Analysts are of the opinion that a recovery in oil prices coupled with the prospect of more support from the world’s central banks has made it possible for the markets to post strong gains.

“After a dismal performance in the recent past, the market is set for an uptrend. Institutional buying is gathering momentum”, said an analyst at a brokerage firm. The market is looking for more triggers for a breakout, he added.

The MSM Shariah Index increased 0.26 per cent to close at 908.500 points. A total of 1,001 trades were executed during yesterday’s trading session generating turnover of RO 6.584 million with 25.963 million shares changing hands. Of the 44 traded securities, 25 advanced, 6 declined and 13 remained unchanged.

Analysts also say that the modest trading volume on the bourse showed many investors remain wary of the longer-term direction.

“The rise in the oil price is very good news for Gulf equities, since much of their weakness in recent months has been due not to the absolute level of oil prices but to fears that they could sink further”, said another analyst.

US crude closed at nearly a three-month high after a new US forecast showed tighter oil supplies next year, while Russia, Saudi Arabia and other big producers hinted at further talks to support the market.

Global crude benchmark Brent returned to above $50 a barrel, breaking range-bound trades since early September that have largely seen the market trade in a $5 band. A weakening dollar added support for oil, as did bets that the US oil rig count could tumble again this week after last week’s unexpectedly sharp decline of 26 rigs.

Oman Daily Observer