Qatar’s index slumped to a new eight-month low in sluggish trade, with local and foreign investors little tempted to open new positions due to a lack of company news and continued worries about the euro zone’s future.
Qatar National Bank fell 0.6 percent, Qatar Telecom dropped 0.7 percent and Qatar Insurance Co slid 2 percent.
The index fell 0.3 percent to 8,239 points, slumping to its lowest level since early October. Trading volumes hit an 11-month low on Wednesday and activity remained muted.
“The market’s decline has been on low liquidity – there’s no panic selling, but also no willingness to take new positions,” says Omnia Ashmawy, a Doha-based technical analyst.
The index broke through a major support at 8,350 points, Ashmawy says. This now acts as a resistance level, while new support is at 8,150.
“The market will move within this range for a while – foreign investors are worried about international markets and Europe, while Qatari investors don’t want to buy because their of summer vacations,” says Ashmawy.
The market slump came as Saudi Arabia’s benchmark made an early-year surge, with investors selling out of Qatar to increase their exposure to Riyadh stocks and now with little company news and summer approaching, there is insufficient interest to spark a rebound.
These factors also mean long-term investors feel no urgency to buy now, with expectations they will be able to accumulate shares at cheaper prices, Ashmawy adds.
Dubai’s index also slumped in muted trade as renewed jitters on world markets spur local selling.
Market bellwether Emaar Properties dropped 0.7 percent, while Dubai Financial Market and Dubai Islamic Bank each slid 0.5 percent.