MIDEAST STOCKS-Oil’s tumble might dampen Gulf Egypt may possibly test resistance

DUBAI Dec 3 A fresh tumble of oil rates overnight looks probably to dampen Gulf stock markets on Thursday, even though Egypt may continue testing technical resistance.

Brent oil, hit by expectations that OPEC will preserve its output ceiling unchanged at this week’s meeting, sank far more than four % to under $ 43 a barrel overnight – to just above a six-year low.

Also, hawkish comments by U.S. Federal Reserve Chair Janet Yellen reinforced the case for a U.S. interest rate hike later this month.

The markets had already been expecting a rate hike, but it could be damaging for the Gulf by slightly increasing pressure for capital outflows and top eventually to tighter monetary policy in the area.

Saudi Arabia’s index, which last closed at 7,347 points, is technically brief-term bullish and has been in an uptrend given that mid-November, but the threat of oil hitting fresh lows could hurt sentiment at least temporarily. The index has technical help at its mid-November high of 7,161 points.

In Egypt, the index, which jumped 3.5 percent on Wednesday to 6,650 points, is set to test minor chart resistance on the late November peak of six,642 points. Any clean break would trigger a double bottom formed by the November lows and pointing up to just beneath 7,000 points.

Egypt’s central bank plans to inject dollar liquidity into the market this month and plans an exceptional foreign exchange auction, the Egyptian presidency said late on Wednesday, the latest move to end a lengthy-running currency crisis.

Authorities’ new energy in tackling the crisis is welcome to the industry, but it remains unclear exactly where Egypt will acquire the difficult currency to improve dollar supplies, and a lot of economists consider a devaluation at some point remains inevitable. So foreign investors could stay cautious.

Speculation might continue more than the fate of Global Telecom , which surged its ten % limit to 1.87 Egyptian pounds on Wednesday in its heaviest trading in five weeks.

In a brief statement, it mentioned a newspaper, which it did not name, had published a story on rumours that European firm Vimpelcom had offered to buy out Global at a price of two.30 pounds per share. Vimpelcom currently owns about 52 % of International, according to the most current data.

The business does not respond to rumours and confirms that the business does not have any material events unannounced,” Global mentioned with no elaborating. Contacted by Reuters in Amsterdam, Vimpelcom stated: “As a matter of policy, we do not comment on market rumours and speculation.”

Final Thursday, Vimpelcom mentioned it and Worldwide would combine their organization in Pakistan with Warid Telecom, which may have prompted speculation about further consolidation. (Added reporting by Anthony Deutsch in Amsterdam Reporting by Andrew Torchia)