DOHA: Qatar Exchange (QE) benchmark index retreated 127.13 points or 1.28 percent to close at 9,771.41 points yesterday due to an extended selling pressure. This is the third straight day the index witnessed a pullback. All the sector indices ended red with Telecoms and Real Estate performing the worst.
The Telecoms index shed 2.08 percent as Real Estate index dropped 1.45 percent. While Banks and Financial services lost 0.92 percent, Industries dropped 1.24 percent. Consumer Goods & Services was down 1.17 percent. Insurance sector lost 0.67 percent and Transportation was down by 1.29 percent.
International Islamic (QIIB), Qatar Islamic Bank (QIB), Electricity and Water and Nakilat were among other top losers. QIIB lost 2.08 percent to QR56.40. QIB dropped 1.96 percent to QR70.10. While Water and Electricity dipped 2.14 percent to QR160, Nakilat dropped 2.36 percent to QR19.05.
QE’s trading data indicated strong sell-off by foreign investors pulling the benchmark index below the 10,000 level for second straight day.
The market breadth confirmed a bearish trend as only three stocks advanced against 35 declining stocks. The volume of shares was up to 12.2 million yesterday from Monday’s 9.1m. The trade value of shares increased to QR534bn from QR460bn.
Meanwhile, Dubai’s stock market tumbled 7.0 percent yesterday, its heaviest one-day loss since the emirate’s corporate debt crisis in November 2009, as it led a regional sell-off on worries about an escalation of Syria’s civil war.
Western powers told the Syrian opposition to expect a Western strike against President Bashar Al Assad’s forces within days, after determining his government was responsible for the use of chemical weapons, said.
It is by no means clear that an escalation of the fighting in Syria would have any impact on Gulf economies. Although it is possible that Damascus and its allies could mount covert action against the Gulf, such action would probably not change positive long-term economic prospects.
Gulf markets were near multi-year highs, so they were vulnerable to a sudden wave of profit-taking by the retail investors who have dominated trade in recent weeks and wanted to lock in gains.
“Politically, the region is a mess and concerns about the war in Syria are high,” said Yassir Mckee, wealth manager at Qatar’s Al Rayan Financial Brokerage.
“But the extent of the drop doesn’t make sense and people are over-reacting because local fundamentals are strong and even if there is a war, I don’t see it significantly impacting Gulf countries.”
Dubai’s index sank to 2,550 points, cutting its year-to-date gains to 57.7 percent. Margin calls hit local individual investors, who were net sellers according to bourse data, while foreigners were net buyers.
Margin calls may keep Dubai under pressure on Wednesday but there is no sign that the positive long-term technical outlooks of Dubai and most other Gulf markets have changed.
Saudi Arabia tumbled 4.1 percent, its largest one-day loss since August 2011, to below the psychologically important 8,000-point level. The heavyweight petrochemicals sector slid 3.5 percent despite rising global oil prices, while the banking sector, the other main weight in the market, also fell 3.5 percent.
The Peninsula/Reuters
