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Thu 16 Aug 2012 10:12 AM

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Kuwaiti politics heats up; last Gulf session before Eid

Most Gulf markets will trade on Thursday for the last session ahead of a long Eid al Fitr holiday, with activity likely to be muted

Kuwaiti politics heats up; last Gulf session before Eid
Most Gulf markets will trade on Thursday for the last session ahead of a long Eid al Fitr holiday, with activity likely to be muted.

Kuwait's measure may witness some volatility on Thursday after the government asked the country's top court to rule on a law that divides the state into five constituencies, setting the stage for a showdown with opposition politicians.

Losses will be limited however, as institutional investors are on the sidelines, due to the instability. The main index hit an eight-year low on Sunday as the political crisis thickened.

Kuwait's opposition accuses the government of wanting to gerrymander electoral districts so as to prevent another opposition majority in the next parliamentary election.

Most Gulf markets will trade on Thursday for the last session ahead of a long Eid al Fitr holiday, with activity likely to be muted.

Elsewhere, Saudi Arabia's measure rose 0.5 percent to close above a psychological support level of 7,000 points in its last trading session ahead of the Eid break.

Dubai contractor Drake & Scull International slumped to a one-week low on Wednesday after it posted disappointing second-quarter numbers that missed forecasts.

The emirate's index ticked up 0.09 percent in the previous session to close at 1,579 points, up for a ninth session in the last 15.

"There is a bearish divergence on the daily chart which gives the [Dubai] index a chance to retrace back towards 1,552," MENA Corp says in a note.

Further exacerbating the lack of regional news flow, global markets also provide a weak direction.

Asian shares steadied on Thursday as investors took to the sidelines, waiting for more clues over the timing and extent of any further stimulus to tackle the euro zone's debt crisis and support global growth.

Stock markets have been riding high in recent weeks on hopes that European Central Bank plans expected to be detailed in September can put a floor under Spain and Italy's debt troubles and prevent the euro zone from unravelling.

Traders have also raised bets the US Federal Reserve will embark on a third round of large-scale bond purchases, but surprisingly strong July figures on employment and retail sales recently kept the optimism in check.

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