Saudi index at seven-week low, most Gulf markets fall

Saudi Arabia's index slumped to a seven-week low, with investors reducing positions ahead of end-of-year school holidays, and Oman's market slipped over fears of downbeat second-quarter corporate earnings. The kingdom's all-share Tadawul index fell 1.1 percent to its lowest close since April 19.
"Most of the technical indicators are giving diversion, some are negative and some are giving reversals - this means the market is weak," said Youssef Kassantini, a Saudi-based financial analyst. "Market is trading in a very tight range. Traders cannot see the direction of the market." All sectors were down, with the heavyweight banking and petrochemical benchmarks shedding 0.7 and 1.2 percent respectively.
"We are entering into the summer when traders make available funds for vacations," added Kassantini. "The market usually corrects around the end of the academic year." Muted buying interest dragged Oman's index down 0.9 percent to its lowest close in June. It fell 5.2 percent in the previous month. "The market was moving up without high volumes so the downward trend is expected," said Adel Nasr, United Securities brokerage manager.
"The issue is we don't have any triggering news. We have good buying from foreigners and institutions but the GCC traders are exiting the market at current levels." Lender Bank Muscat fell 1 percent, telco Nawras slid 1.4 percent and Renaissance Services shed 1.1 percent. "The worst scenario is the Q2 results - expected to be below the Q1 - and people are selling ahead of it," Nasr added. He cited a strong resistance at 6,090 level and support at 5,950 level.
In Dubai, real estate stocks tumbled, weighing on the index that fell 0.8 percent, ending two-day gains. Bellwether Emaar Properties shed 2.2 percent, Air Arabia was down 0.3 percent and Union Properties slipped 1.8 percent. Union Properties said it plans to repay 2 billion dirhams ($544.5 million) of debt this year and will seek to renegotiate terms for its other loans with banks.
"UAE was following Saudi's move today and we saw heavy selling pressure in the UAE's real estate sector across the board," said Sleiman Aboulhosn, assistant fund manager at Al Masah Capital. "Perhaps the resurfacing of Union Properties ails reminds everyone of the overall sector's continued weakness, driven by muted demand and falling prices, fuelling the fire of the short-term downward trend."
Abu Dhabi's benchmark gained 0.2 percent to a fresh one-month high and banks supported. Abu Dhabi Commercial Bank rose 0.3 percent, up for a fourth day. Heavyweights First Gulf Bank climbed 2.4 percent and small-cap stock Finance House surged 9.7 percent.