The rebound of Gulf stock markets may stall on Wednesday, at least temporarily, after oil prices slipped back slightly in Asian trade. Also, most bourses are largely done with their earnings seasons, so there may be fewer fresh incentives to buy stocks.
Brent crude traded below $58, down 0.2 per cent, after surging almost 6 per cent on Tuesday when oil major BP and top Chinese offshore energy producer CNOOC said they would deepen capital investment cuts this year to adapt to lower oil prices.
Oil’s surge, which began last Thursday, had been a key factor supporting Gulf markets and, in particular, Saudi Arabian petrochemicals such as Saudi Basic Industries.
However, Asian share markets are following Wall Street higher on Wednesday on revived risk sentiment and amid speculation that China’s central bank would be the next to ease policy following moves in Australia and Singapore.
Dubai’s stock index, which jumped 2.5 per cent on Tuesday to 3,894 points, faces resistance on the January high of 3,960 points.
Among a handful of local companies that have yet to report their fourth-quarter results is Air Arabia, which has risen 12.7 per cent this year on hopes that cheaper fuel will boost its profits. It is not clear when the company will post its earnings.
In Saudi Arabia, the main index was volatile in the last session after rising strongly earlier in the week and closed well off its intra-day high, edging up just 0.2 per cent to 9,227 points. It faces a chart barrier at 9,399 points, the 100-day average.