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MIDEAST STOCKS-Oil near $60 may support Gulf bourses
September 26, 2017 / 6:00 AM / 3 months ago

MIDEAST STOCKS-Oil near $60 may support Gulf bourses

DUBAI, Sept 26 (Reuters) - Riyadh’s stock market may recover slightly on Tuesday, from the previous day’s steep fall, as investors buy on price dips and as crude oil nears $60 a barrel.

Saudi Arabia’s stock market index fell 1.4 percent on Monday, diverging from Brent oil, amid rumours that index compiler FTSE might not upgrade Riyadh to emerging-market status as quickly as hoped.

At the end of the business day on Sept. 29, FTSE will announce its decision on whether to include Saudi Arabia in its secondary emerging market index - although capital inflows would not occur until the decision actually takes effect, probably in late 2018.

“Today, some investors may hunt for bargain stocks after most of the companies that were likely to make it into FTSE, saw their prices drop between 1-2 percent,” said a Riyadh-based equity portfolio manager.

Brent oil surged 3.8 percent overnight to settle at $59.02 a barrel after major producers said the global market was on its way to rebalancing, and the commodity continued to climb early on Tuesday.

This may bode well for other markets in the region, but gains may be capped by rising tensions in the Korean Peninsula. North Korea’s foreign minister said on Monday that a weekend tweet by U.S. President Donald Trump counted as a declaration of war on North Korea and that Pyongyang reserved the right to take countermeasures, including shooting down U.S. bombers even if they are not in its air space.

MSCI’s broadest index of Asia-Pacific shares outside Japan was last down 0.7 percent. (Reporting by Celine Aswad; Editing by Biju Dwarakanath)

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