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DUBAI, July 2 (Reuters) - Qatar's stock market may come under pressure on Sunday as a deadline to accept a series of politcal demands by four Arab states is expected to expire late in the day with no sign of the crisis ending.
Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani said at the weekend that the demands were made to be rejected; he insisted Qatar would not close down a Turkish military base or shut Doha-based satellite channel Al Jazeera.
The four Arab states have warned they may impose further sanctions if Qatar does not comply; they did not give details, but bankers believe, for example, that Saudi, United Arab Emirates and Bahrain banks may receive official guidance to pull deposits from Qatar.
However, equities selling pressure in Qatar may only be moderate. On June 22, the last day on which the market traded before closing for a week-long Eid al-Fitr holiday, foreign funds were net buyers of Qatari shares for the first time since the crisis erupted on June 5.
This suggested some funds are willing to bear the heightened geopolitical risk because some companies offer attractive dividend yields, while the market's plunge last month improved valuations.
Gulf Cooperation Council investors remained net sellers of Qatari stocks on June 22, as they have been consistently, but their pace of selling has been slowing.
Meanwhile Brent oil has risen to $48.77 a barrel, gaining for seven straight sessions. On June 22, when the Saudi index last traded before its week-long Eid break, oil was near $45 a barrel.
This could buoy the Saudi market on Sunday. Sentiment towards Riyadh has also been optimistic because index compiler MSCI placed it on a watch list on June 20 for possible upgrade to emerging market status, and since the architect of Saudi economic reforms, Prince Mohammed bin Salman, was named crown prince at about the same time.
The index closed at an October 2015 high on June 22 and is up 3 percent since the start of the year. (Reporting by Celine Aswad,; Editing by Andrew Torchia)