August 14, 2019 / 1:47 PM / 10 months ago

MIDEAST STOCKS-Egypt extends gains on inflation data, Gulf dips on recession fears

    * Qatar closes at lowest in nearly a year
    * Egypt at its highest in three and half months
    * Financials biggest drag on Qatar, Abu Dhabi
    * Real estate weak in Dubai

    By Maqsood Alam
    Aug 14 (Reuters) - Egyptian blue-chip stocks rose to their
highest in nearly three and a half months, extending the
previous session's gains, after Egypt reported
better-than-expected inflation data for the month of July. 
    Most Gulf markets traded on Wednesday after a three-day Eid
holiday, while Saudi Arabia and Oman will resume trading on
    Egypt's blue-chip index surged 2.5% to 14,541
points, a level not seen since May 5. The country's biggest
lender Commercial International Bank rose 2.8%, while
El Sewedy Electric jumped 8.1%.
    Egypt reported on Thursday that its headline inflation rate
had fallen to its lowest in nearly four years, dropping to 8.7%
in July and defying analyst expectations since it followed a
fresh round of fuel subsidy cuts that pushed domestic fuel
prices up by 16%-30%.
    The inflation data provides enough room for the central bank
to embark on monetary easing. Last month the monetary policy
committee kept key interest rates on hold at 15.75% and 16.75%
for overnight deposit and lending, respectively.
    But in the Gulf, major markets reversed earlier gains as
optimism over Washington delaying tariffs on some Chinese
imports gave way to fears that the global economy was heading
toward recession in the wake of a slump in Germany's exports and
slowing Chinese industrial growth.
    Germany's disappointing exports sent Europe's largest
economy into reverse in the second quarter as its manufacturers
bore the brunt of a global slowdown amplified by tariff
conflicts and uncertainty over Brexit.
    China's economy stumbled more sharply than expected in July,
with industrial output growth cooling to a more than 17-year
low, as the intensifying U.S. trade war took a heavier toll on
businesses and consumers
    Qatar's index was down 1.6% to 9,676 points, its
lowest lose since August 26, 2018. Market heavyweight Industries
Qatar decreased 3.9% while Qatar National Bank
 dropped 2.9%.
    In Abu Dhabi the index fell 0.9% with First Abu Dhabi
Bank sliding 0.9%, and investment firm Waha Capital
 plunging 6.9% after swinging to second-quarter loss. 
    In Dubai, the index was down 0.2% with blue-chip
developer Emaar Properties and Dubai Islamic Bank
 both trading 0.6% lower.
 ABU DHABI   The index        shed 0.9% to 5,054 points
 DUBAI       The index          was down 0.2% at 2,832 points
 QATAR       The index        dropped 1.6% to 9,676 points
 EGYPT       The index          rose 2.5% to 14,541 points
 BAHRAIN     The index        was down 0.3% at 1,540 points
 KUWAIT      The index        was up 0.4% at 6,742 points
 (Reporting by Maqsood Alam in Bengaluru
Editing by Alexandra Hudson)
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