Gulf rally seen short-lived; oil slips

Gulf investors are likely to book profits from Sunday's rally as oil resumes its slide
Gulf rally seen short-lived; oil slips
With many away for summer holidays, local investors will be cautious ahead of second-quarter earnings in coming weeks.
By Reuters
Mon 02 Jul 2012 10:20 AM

Gulf investors are likely to book profits from Sunday's rally as oil resumes its slide and Saudi Arabia's gains proves short-lived.

Brent crude dropped towards US$96 a barrel on Monday as weak factory data from top energy consumer China spurred caution, after oil prices posted their fourth biggest daily gain on record in the prior session.

Most Gulf markets were bouyed on Sunday by a deal European leaders made to shore up the region's troubled banks, while Saudi Arabia's index ended near flat in its second session since the EU move.

With many away for summer holidays, local investors will be cautious ahead of second-quarter earnings in coming weeks.

"Our markets are led by retailers and in the summer, these back off," says Fouad Darwish, head of brokerage at Global Investment House. "I expect people to try and make quick gains and wait until after Ramadan for re-enter."

In Kuwait, the Emir, Sheikh Sabah al-Ahmad al-Sabah, accepted the resignation of the of the government, state news agency KUNA said on Sunday, in a move that could help ease a political crisis after a court ruling effectively dissolved parliament.

The emir will now appoint a new cabinet, after which analysts expect a reinstated assembly to be dissolved so that a new parliamentary election can be held, probably after the Muslim holy month of Ramadan, which starts around July 19.

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