FX COMMODITIES
ending on 9 June, aſter a few days of the cut off with Qatar. Qatari stock index lost more than 7.00% at
end of that week, led by losses in the financial sector.
A week later, Qatari stocks took the opposite direction with marginal gains of 0.2% supported by real estate shares, which were regarded by investors as the safest sector amid the development of the crisis.
number of Gulf States.
Te third reason is that Qatar is apparently stepping in leading the process of shaping the conflict in the Middle East, which is strongly resisted by the US and Saudi Arabia.
GCC Markets Reaction Tensions and threats of a diplomatic
break between Qatar and Saudi Arabia on one hand, and UAE and Bahrain on the other, as well as a blockade imposed on Doha, dominated stock markets in GCC states and raised concerns about the emergence of financial and economic developments.
After the blockade was first announced, the performance of Gulf stock indexes was mixed during the first week, and further negative development s on the economic and political levels started to overshadow the stock markets.
Saudi, Abu Dhabi, Kuwaiti, and Qatari stock indexes slumped on a weekly basis in the week
54 FX TRADER MAGAZINE July - September 2017
At the time of writing, we anticipate that the limited gains registered mid June could sign the beginning of a strong uptrend for Qatari stocks, if oil prices recover from the negative close that persisted for weeks.
Te Gulf stock markets are expected to recover from the effects of the diplomatic crisis and blockade as markets have digested the news about the crisis throughout these two weeks and no strong developments were in play. Te overbought status witnessed by Qatari stocks during the first two weeks of incidents in the Gulf region, could be the drive of an upside movement in Qatari stocks.
Oil is unlikely to be affected by the crisis as it has a different story aſter the 22nd consecutive increase in the number of US shale oil rigs, which raised concerns over the efficiency of OPEC production cut deals as increase in US oil production was suggested to offset the production cut.
Mohammed Zidan
Chief Market Strategist TinkMarkets
the
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