DUBAI, June 19 (Reuters) - Depressed oil prices and lack of fresh news may weigh on stock markets in the Gulf but hopes that Saudi Arabia will join MSCI's group of emerging markets, which would trigger billions of dollars of fund inflows, may continue to buoy that market.
Saudi-listed stocks that could benefit from the the MSCI upgrade have already been jovial include food producers Savola and Almarai and some of the blue-chips lenders like National Commercial Bank and the largest petrochemical producer Saudi Basic Industries.
The MSCI review will be announced on Tuesday.
It is not unusual for stocks to rise ahead of such an event as investors try to buy stocks before foreign funds start to move money into the market once the decision has been made, but some analysts are cautious, saying that current market fundamentals are not very supportive.
"While we believe that an inclusion in watchlist for Saudi will lead to enhanced market liquidity and generate more interest in the Saudi market, we caution investors to be wary of irrational exuberance as an inclusion is unlikely to change market fundamentals which currently remain tepid," said a note by Saudi's Alrajhi Capital.
Meanwhile Brent crude contracts are hovering near 2017 lows at $47.22 a barrel; they have closed below $50 a barrel in the last eight consecutive sessions, which have kept institutional funds away from most Gulf markets, a trend which is likely to persist.
Reporting by Celine Aswad; Editing by Saeed Azhar