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Thu 16 Sep 2010 11:21 AM

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Kuwait banks fall; lenders look overbought

Kuwait's main index slips 0.02% to 6,825 points, slipping from Wednesday's 16-week peak.

Kuwait banks fall; lenders look overbought
(Getty Images)

Banks weighed on Kuwait's index KWSE as investors booked profits from the sector's 21-month high on Wednesday.

Banks had surged ahead of a $104bn government development plan that is expected to be part funded through state-backed bank loans.

National Bank of Kuwait dropped 1.4 percent, Kuwait Finance House fell 3.5 percent and Commercial Bank of Kuwait was down 4.4 percent.

The banking index dropped 0.4 percent, easing from Wednesday's close of 10,750 points, its highest finish since Dec. 17, 2008. The benchmark was trading at a relative strength index (RSI) of 75.7, with a value above 70 giving an overbought signal, traders said.

"Everyone has been interested in banks and are expecting them to get approval from the government to fully finance the development plan," said Essa al-Hasawi, assistant manager at Zumorroda Investment Co in Kuwait.

"NBK is having a rest now after making a huge rally in the past 2-3 weeks, but people are still positive on the banks."

Kuwait's main index slipped 0.02 percent to 6,825 points, slipping from Wednesday's 16-week peak.

Hasawi said the market is likely to move sideways next week as a large cap rally runs out of steam, although smaller cap stocks may advance in a catch-up play. (Reuters)

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