Gulf may move sideways; Egypt technically bearish

 22 Jun 2016 - 8:47

Gulf may move sideways; Egypt technically bearish
File photo used for representation. Reuters 


DUBAI: Gulf stock markets may move sideways on Wednesday after oil climbed back over $50 a barrel but with international markets bracing for Britain's in-or-out European Union referendum on Thursday. Egypt's market remains technically weak.

Most Gulf markets have been consolidating in modest trading volumes for the past couple of weeks and while an "in" vote could prompt a relief rally, the summer holidays and Ramadan mean any move may be small. Even speculation over bank mergers in Abu Dhabi showed signs of dying down on Tuesday.

Marwan Shurrab, fund manager at Dubai-based Vision Invest, believes Gulf Cooperation Council markets would basically only react to an exit vote.

"If there is an exit, then the volatility in international markets will spill over into GCC stocks - otherwise volatility is expected to remain subdued."

Cairo's main stock index, last at 7,251 points, rebounded 0.7 percent on Tuesday but failed a test of the neckline of a head & shoulders pattern triggered earlier this week. That keeps it technically bearish.

Ibrahim al Nimr, head of technical analysis at Cairo's Naeem Brokerage, said the index had broken multiple support and looks set to test the major support at 7,000 points.