Friday 27 / December / 2024
Muscat: The Omani stock market continued to trade sideways, extending the trend of the last two months during which the market was unable to find a clear direction, according to an analyst.
However, volatility remained elevated with uncertainty affecting sentiment among investors which monitored developments on other global stock markets as well as on energy markets.
“Despite its lack of clear direction, the main index was able to record a small gain this week supported by the slightly positive performance of the services and financial sectors,” Ahmed Negm Head of Market Research Mena at XS.com, said. “The industrial sector, however, remained mostly unchanged, lagging the rest of the market,” he added.
Individual stocks were seeing mixed results with strong price swings in some cases with smaller stocks on the parallel market in particular leading performances. “On the regular market, price changes were more limited. At the same time, bank stocks represented the bulk of trading volumes,” Ahmed Negm said.
He further added that Omani stocks could see some gains during the next trading sessions if volumes continue to increase compared to the previous few weeks. The market could also benefit from stronger oil prices if the energy market remains on its current upward trend.
Oil prices were able to rebound after a period of uncertainty and could provide some support to investors’ sentiment. Omani oil prices have rebounded in the same way and neared this year’s high. “Crude prices could see strong gains as traders’ expectations lean toward a tighter market while oil exporters could extend production cuts and demand could be more solid as shown by the US crude inventory drawdowns that were stronger than expected,” he added.
Globally, sentiment was shifting regarding inflation and monetary policy. At the same time, figures on the US job market were affecting expectations while US gross domestic product (GDP) figures were below forecasts, adding to the uncertainty around monetary policy in the US, Ahmed Negm said.
Monetary policy could remain a consistent source of concern for the market while the risk of another interest rate hike remains present this year. “However, expectations lean toward the Federal Reserve leaving rates unchanged at their next meeting later this month, even though uncertainty could weigh on investors’ appetite for risk in the meantime,” Ahmed Negm said.
Traders’ attention could turn to the coming economic data releases in major economies. PMI figures in the US could affect the market as well as job market data. GDP figures in Europe and Japan could also come under scrutiny, he further added.
Last week, the stock market benefited from investor interest in a number of blue-chip stocks for which demand increased, with the stock market witnessing trades worth OMR15.9 million compared to OMR13.1 million in the previous week, recording an increase of 21 percent. However, bond and sukuk market trading witnessed a decline of more than OMR13.1 million in the previous week.
