Sunday 27 / October / 2024
Muscat: The Omani stock remained on a relatively positive note this week despite some volatility and was able to maintain the current uptrend that started with a rebound in the previous month, according to an industry expert.
“While the second part of June saw a strong performance, July started in a more mitigated direction as traders could brace for some potential price corrections if sentiment turns to caution. On a larger time scale, the market could remain on an uncertain path after declining in May below its previous bottom of the year,” said Daniel Takieddine, BDSwiss CEO MENA.
The market was supported by the financial sector once again which saw several banks extend gains. “The banking sector remains one of the strongest on the market and has been building support for the main index. Banks could continue to see consolidation efforts after the merger of Sohar Bank and HSBC Oman. They have dominated trading volumes with Bank Muscat leading the market, behind only Abraj Energy,” he added.
The energy sector could also see a more positive direction with oil prices recovering to a certain extent after a period of range-bound trading and volatility. The announcement that Russia and Saudi Arabia would cut production levels could help put a floor under the market and push prices to the upside. For some time the market has been struggling with demand expectations while the global economy slowed down. Consistently higher oil prices could provide support to the energy sector and the Omani stock market as a whole.
At the same time, traders could continue to monitor the economic developments in the US. The last few days were seeing strong volatility while data on the US job market introduced some doubts over the potential direction of the US monetary policy. “Attention will be turning toward inflation figures next week which could affect markets globally and sentiment in Oman while the Federal Reserve maintains its aggressive stance despite a pause in interest rate hikes,” Daniel Takieddine said. “The impact of new hikes could find its way into the Omani stock market where banks could benefit from wider margins while the wider economy could be weighed by higher financing costs,” he added.
Other stock markets in the other GCC countries could also see some volatility next week as traders brace for US data releases and oil price movements. Like their Omani counterpart, other GCC stock markets could be exposed to price corrections after some recorded significant gains during the last few days to weeks.
