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Gulf sentiment may remain negative as oil extends losses

Gulf sentiment may remain negative as oil extends lossesDUBAI: Gulf stock markets may stay under pressure on Sunday after oil prices fell further, with no major corporate news to offset the negative background.

Crude oil dipped on Friday, plumbing multi-month lows and posting a sixth straight week of losses, as the approaching end of the U.S. summer driving season suggested a growing surplus in gasoline supply.

Brent settled down 91 cents, or 1.8 percent, at $ 48.61 a barrel. It was down 7 percent for the week and fell 23 percent over the past six weeks.

In global equities, Wall Street stocks ended down on Friday after the monthly U.S. employment data came close enough to forecast to stoke bets the Federal Reserve will raise interest rates for the first time in nearly a decade perhaps as early as September.

European shares fell 0.9 percent after data showed German exports and industrial output falling in June, a setback that underlined the need for central bank stimulus in the euro zone.

In the Gulf, the second-quarter earnings reporting season is largely over, with the exception of several companies in the United Arab Emirates, so there may be very few, if any, positive catalysts for the stock markets.

According to Riyadh-based Albilad Capital, the aggregate net profit of companies listed on the Saudi stock exchange tumbled 8 percent year-on-year in the second quarter.

“This decline was fuelled by a 32 percent decrease in the total profits of the petrochemical sector as petrochemical prices experienced… sharp declines matching the drop in oil prices to their lowest level in more than five years,” it said in a note.

In Egypt, Global Telecom may rise after it swung to a quarterly profit of $ 28 million, which compared with a loss of $ 175 million a year earlier.

Copyright Reuters, 2015

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