Oil’s rebound may support Gulf - Dubai faces resistance

Oil has slipped further on Thursday as attention returns to the talks with Iran (File photo: AP)

Gulf stock markets may rise on Thursday after oil prices rallied late on Wednesday, but lingering uncertainty around the nuclear talks with Iran may limit gains. Dubai’s index faces minor technical resistance at its late March peak.

Both Brent and U.S. crude prices ended three-session losing streaks on Wednesday, gaining $2 or more after data from the Energy Information Administration showed that a fall in rigs drilling for oil resulted in a drop in U.S. crude output last week for the first time since late December.

Oil has slipped further on Thursday as attention returns to the talks with Iran, but it is well above its levels when most Gulf markets closed on Wednesday.

Major powers and Iran have stretched talks on Tehran’s nuclear program into a second day past an end-March deadline, with diplomats saying prospects for a preliminary deal in the coming hours are balanced between success and collapse.

Dubai’s index could test technical resistance at its late March high of 3,538 points after it rose to 3,532 points on Wednesday. A clear break of that level would trigger a minor bullish right triangle pointing up to the 3,800-point area.

Builder Arabtec may rise after Egypt’s Middle East News Agency reported that the Cairo government had approved Arabtec’s proposals regarding the long-planned deal to build a million housing units in Egypt. It remained unclear, however, if the deal had actually been finalized, and there was no immediate comment from Arabtec.

Meanwhile, Abu Dhabi’s market may come under pressure because of heavyweight telecommunications firm Etisalat, whose shares no longer carry the 2014 dividend. Among other ex-dividend stocks in the Gulf are Waha Capital in Abu Dhabi and Saudi Telecom.

On global markets, Asian shares have edged up, partly because investors covered short positions in Japan ahead of the Easter holidays.

SHOW MORE
Last Update: Wednesday, 20 May 2020 KSA 09:45 - GMT 06:45
Top