DUBAI, May 25 (Reuters) - Stock markets in the Gulf may consolidate on Thursday as crude oil prices firmed and global shares rebounded, but trading volumes are expected to be thin in the lead-up to Ramadan.
Brent crude futures stayed near the previous session’s one-month peak and were trading at $54.40 per barrel. Members of the Organization of the Petroleum Exporting Countries (OPEC) are expected to meet later in the day in Vienna to discuss the potential of extending output cuts to March 2018, a three-month extension to the previously agreed upon end-2017 date.
Meanwhile, the cut to China’s credit rating - its first in nearly three decades - rocked Asian markets on Wednesday, but they managed to regain strength with MSCI’s broadest index of Asia-Pacific shares outside Japan advancing 0.7 percent on Thursday morning, near two-year highs.
Appetite revitalised after the U.S. Federal Reserve signalled a cautious approach to future rate hikes and the reduction of its $4.5 trillion of bond holdings.
Stock markets in Qatar and the United Arab Emirates - which are the Gulf bourses most exposed to foreign fund flows - may benefit the most, although the performance of Dubai’s stock market has been somewhat lagging other emerging markets since the start of the year with MSCI emerging market constituents lagging behind peers.
Technically the index, last at 3,352 points, is bearish, said analysts at NBAD Securities.
“Break below the ascending channel support at 3,340 may trigger another drop towards the next critical support level at 3200,” NBAD Securities said.
Meanwhile, the Saudi index may see very low turnover on Thursday as investor turnout may be low ahead of the month-long Ramadan Muslim fasting period, which historically sees thinned trade. (Reporting by Celine Aswad; Editing by Subhranshu Sahu)