DUBAI, Nov 1 (Reuters) - Gulf stock markets moved sideways in narrow ranges early on Wednesday as rising oil prices again failed to boost Saudi Arabia’s petrochemical sector, a sign of investors’ concern about upcoming austerity policies.
Brent oil hit a two-year high of $61.41 per barrel overnight and was at $61.27 early on Wednesday. But top Saudi petrochemical producer Saudi Basic Industries was flat and National Petrochemical fell 1.0 percent after reporting a marginal rise in quarterly net profit to 196.9 million riyals ($52.5 million) from 191.6 million riyals.
Higher oil prices tend to be positive for profit margins at Saudi petrochemical firms but the industry faces the prospect of more austerity steps as the government cuts its budget deficit: domestic electricity and fuel price hikes could come within months and higher gas feedstock prices as soon as 2019.
The Saudi stock index was flat. City Cement edged up 0.5 percent. It reported that quarterly profit fell sharply to 19.2 million riyals ($5.3 million) from 32.9 million riyals a year earlier, but beat a forecast of 8.60 million riyals by Aljazira Capital.
Alawaal Bank added 0.9 percent after its profit jumped to 363 million riyals from 262.8 million riyals, largely because of a drop in loan impairment charges after several quarters of high charges. EFG Hermes had forecast 367 million riyals and NCB Capital, 295 million riyals.
Islamic insurer Solidarity surged 3.2 percent after reporting a 39 percent rise in quarterly profit before zakat, although gross written premiums fell sharply.
In Dubai, the index edged up 0.1 percent as Emaar Properties added 0.2 percent. On Thursday, Emaar is expected to announce the indicative price range for an initial public offer of shares in its local property development unit.
Qatar’s index also edged up 0.1 percent but Qatar Fuel Co (Woqod) sank 2.0 percent to 91.10 riyals, falling below major technical support on its January 2016 low of 91.74 riyals.
The fuel products distributor, which last week reported a 17 percent drop in nine-month net profit, has been in a downtrend since January. (Reporting by Andrew Torchia; Editing by Jon Boyle)