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DUBAI, June 14 (Reuters) - Gulf stock markets look set to consolidate on Wednesday ahead of the U.S. interest rate hike expected later in the day. Wall Street rose to fresh record highs overnight but Brent oil prices fell back near $48 a barrel.
Any major rebound still looks unlikely in Qatar. The index is down 8.4 percent since economic sanctions were imposed by other Gulf states last week. "A rebound in the market will be capped as long as the boycott is in place," said a Doha-based fund manager.
Foreign funds, which have been net sellers since the diplomatic and trade boycott started on Monday last week, have slowed their pace of selling since the start of this week and on Tuesday they accounted for one-quarter of market turnover. Non-Qatari Gulf trades have thinned.
Abu-Dhabi listed natural gas explorer Dana Gas may continue to rise on momentum after it soared its 15 percent daily limit on Tuesday as it proposed swapping $700 million of outstanding Islamic bonds for much cheaper instruments. It said it had discovered its current sukuk were "unlawful".
Restructuring the sukuk would mean lower future cash outflows, and unlike the existing sukuk the new instruments would not have an equity conversion feature - positive for the stock price.
However, an Abu Dhabi-based asset manager said the stock's strong gains were not necessarily justified and the result of the company's legal effort to declare its debt invalid was not yet clear. (Reporting by Celine Aswad; Editing by Andrew Torchia)