Gulf pulls back on caution
Dubai : Stock markets in the Gulf retreated yesterday in shrinking trading volumes as investors turned cautious ahead of the US interest rate hike and guidance from the US central bank expected late in the day.
Petrochemical shares, which have been dragging Saudi Arabia’s main index lower over the last two sessions, fell further. The main index lost 0.6 per cent and all but one of the 14 listed petrochemical producers fell. PetroRabigh dropped 3.3pc.
Wednesday marked the market’s second consecutive day of shrinking trading volume. The 2017 budget, expected to be announced late this month, looks likely to include more domestic fuel subsidy cuts, which is prompting some investors to cash out of domestic demand-focused shares for now.
Electronics and bookstore retailer Jarir fell 1.3pc.
In Egypt, the main index pulled back a further 0.6pc with selling pressure escalating in the final hour of trade.
Losers outnumbered gainers 24 to five with Orascom Telecom , the most heavily traded share, slumping 5.2pc. Shares in the conglomerate have been beaten down 20pc since the company said its chief executive, billionaire Najuib Sawiris, announced early this month that he would step down.
Dubai’s index fell for a second straight day, dropping 1.2pc to 3,584 points. It retreated below major technical resistance on its August peak of 3,624 points.
Trading volume shrank by roughly a half from the previous day’s very large amount. Most activity focused on mid-sized speculative shares, suggesting local short-term traders were the main players and that foreign investors, who had been active buyers in previous days, had pulled back.
Builder Drake & Scull, the most heavily traded stock, fell 1.8pc. Union Properties lost 1.7pc.
Profit-taking also hit Abu Dhabi, dragging the index down 0.9pc. Telecommunications operator Etisalat fell 1.3pc and First Gulf Bank dropped 1.9pc.
Qatar’s main index, which had outperformed its regional peers on Tuesday, retreated 0.4pc. Commercial Bank lost 3.1pc to 32.40 riyals on the first day of trading of its rights issue, which will end on Dec. 28. The bank is offering new ordinary shares at 25.50 riyals each.
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