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DUBAI, May 31 (Reuters) - Stock markets in the Gulf look likely to be flat to slightly lower on Wednesday as an overnight pull-back in oil prices may keep institutional funds on the sidelines.
Brent crude has dropped more than 0.5 percent from its levels during Gulf hours on Tuesday and is now at $51.59 a barrel. Wall Street closed marginally lower.
In the absence of positive corporate or economic policy news within the Gulf, the international environment may dominate the direction of regional markets, and it is not particularly positive.
"Market sentiment as well as direction is likely to be influenced by macro factors such as oil prices, geopolitics and global economic developments," said Scahin Mohindra, portfolio manager at Invest AD.
Changes to MSCI's indexes, due to take place on June 1, look set to determine passive fund flows in a few Gulf stocks on Wednesday, since passive funds generally move about a day before index changes.
Dubai developer DAMAC Properties is being added to MSCI's United Arab Emirates index; analysts at EFG Hermes estimated last month that at least $90 million of passive inflows could enter DAMAC. The stock moved sharply after MSCI's announcement in mid-May, however, so there may be heavy selling into strength.
Gulf General Investment will be deleted from MSCI's small-cap index while Qatar's Gulf Warehousing will be added.
MSCI will also add investment bank and brokerage firm EFG Hermes to the MSCI Egypt index while deleting real estate developer Talaat Mostafa; EFG estimated flows of around $30 million as a result.
Dubai's DXB Entertainments, which has rebounded in the last couple of days from a two-year low, may continue to attract interest after saying it had appointed Mohamed Almulla as chief executive. Almulla was previously was previously CEO of Arab Media Group, part of Dubai Holding. (Reporting by Celine Aswad; Editing by Andrew Torchia)