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| 11 September, 2018

Tuesday outlook: Asian shares, oil prices firm

Asian shares were mostly flat during Tuesday’s session after eight straight session of losses. Middle East markets mostly added gains on higher oil prices. More commentary on oil prices, currencies and precious metals.

People look at trading boards at a private stock market gallery in Kuala Lumpur, Malaysia May 14, 2018.

People look at trading boards at a private stock market gallery in Kuala Lumpur, Malaysia May 14, 2018.

Reuters/Stringer
  • Asian shares flatten after many losses
  • Stock markets in the Middle East mostly add gains
  • Oil prices edged higher on tightening supply
  • The dollar stays strong, gold prices retreat

Global markets

Asian shares were mostly flat during Tuesday’s session after retreating on Monday for the eighth straight session as trade tensions between the United States and China weighed on equities since the start of September after American President Donald Trump on Friday threatened tariffs on a further $267 billion worth of Chinese imports.

MSCI’s broadest index of Asia-Pacific shares outside Japan was mainly flat.

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“Although the end of the $200 billion consultation period ended without much clarity, there was no very strong escalation and APAC equities had declined significantly into the event,” analysts at JPMorgan said in a note, according to a Reuters report.

On Wall Street overnight, the Dow fell 0.23 percent, while the S&P 500 gained 0.19 percent and the Nasdaq 0.27 percent.

Middle East markets

Most stock markets in the Middle East rose on Monday, boosted by a rebound in oil prices.

Dubai’s index edged 0.24 percent higher boosted by shares in Islamic Arab Insurance Company (Salama) and Deyaar Development which outperformed the rest of the market, rising 12.04 percent and 5.92 percent respectively.

Salama was the most heavily-traded stock in terms of volumes, attracting nearly half of the traded volumes on the exchange, while Deyaar was the second-most traded stock in unusually heavy trade.

Deyaar’s stock price ended the session at 0.447 dirhams, rising above the 100-day average for the first time since March 2018.

“There isn’t any news on Deyaar and based on market movement, it seems that speculators are back for some quick trades,” Issam Kassabieh, senior financial analyst  and head of research at Menacorp Finance told Zawya yesterday by email.

Abu Dhabi’s index added 1.4 percent. First Abu Dhabi Bank surged 3.2 percent, while Abu Dhabi Commercial Bank added 2.2 percent and Union National Bank rose 4.8 percent.

Saudi Arabia’s index dropped 0.3 percent as a late drop in Saudi Basic Industries’ shares, which ended 1.0 percent lower, weighed on the index. Leejam Sports, which conducted this year's first initial public offer of shares on the main market, fell 1.9 percent from its IPO price to 51.0 riyals.

Qatar's index rose 0.7 percent, boosted by the banking sector. Qatar National Bank surged 1.7 percent and Qatar Islamic Bank added 1.5 percent.

Egypt’s index dropped 0.7 percent, Kuwait’s index gained 0.2 percent, while Bahrain’s index edged down 0.1 percent and Oman’s index surged 0.7 percent.

Oil prices

Oil prices edged up early on Tuesday on tightening global supply.

Energy services firm Baker Hughes said on Friday that U.S. energy companies cut two oil rigs last week, bringing the total count to 860.

The market also was pricing in new U.S. sanctions on Iran starting November, which also pushed prices.

But prices were capped by signs that increased supplies by other major producers, including the U.S. and Saudi Arabia, could make up for the disruptions from Iran.

U.S. West Texas Intermediate (WTI) crude futures were at $67.61 per barrel at 0112 GMT, up 7 cents from their last settlement.

Brent crude futures climbed 11 cents to $77.48 a barrel.

“It was a mixed performance in the crude oil market,” said ANZ bank in a note, pointing to Washington’s sanctions against Iran’s oil exports that will be enforced from November, according to a Reuters report.

Currencies

The dollar was flat in early trading on Tuesday against a basket of six major currencies, but stayed near strong figures.

Emerging market currencies remained under pressure with a broad index down near 16-month lows and the Indian rupee near a record trough of 72.675 per dollar.

“Weakness is set to remain a recurring theme amid global trade tensions, a broadly stronger dollar and prospects of higher U.S. interest rates,” Lukman Otunuga, a research analyst at broker FXTM, told Reuters.

Precious metals

Gold prices retreated on a strong dollar on Tuesday.

Spot gold was down 0.1 percent at $1,194.30 at 0106 GMT.

U.S. gold futures were mostly steady at $1,199.60 an ounce.

(Writing by Gerard Aoun; Editing by Shane McGinley)

(gerard.aoun@thomsonreuters.com)


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