DUBAI, Oct 4 (Reuters) - Saudi Arabia’s stock market may rebound moderately on Tuesday after Brent crude oil held firm over $50 a barrel overnight and the index closed well off its intra-day low on Monday, even though its finish was the lowest since March 2011.
NCB Capital said in a note that the outlook for the Saudi petrochemical sector was “positive” because of last week’s OPEC agreement to cut oil production and the sector’s international exposure, which protected it from a weakening domestic consumer economy.
Saudi domestic-demand driven companies were dumped en masse last week after the government announced plans to reduce civil service employees’ compensation packages, and they have continued to trend lower this week.
Worries about the domestic economy are not likely to go away any time soon, but many stocks may have fallen enough to attract some buying-back, at least on a short-term basis. The Saudi index, last at 5,416 points, has major technical support on the March 2011 intra-day low of 5,232 points.
Any rebound in Saudi Arabia could buoy other Gulf bourses, although Dubai’s index turned technically bearish on Monday when it closed 1.9 percent down at 3,408 points, breaking technical support on the August and September lows of 3,430-3,442 points, which becomes immediate resistance.
Aramex may attract interest after it said it had established an e-commerce joint venture with state-owned Australia Post, in a move that could herald a new expansion drive by the Dubai company. (Reporting by Celine Aswad; Editing by Andrew Torchia)