DUBAI: Qatar’s stock market bounced back Thursday, after the Qatari government appeared to adopt a conciliatory stance in its diplomatic dispute with a group of fellow Gulf nations. Saudi Arabia, the United Arab Emirates and Bahrain withdrew their ambassadors from Doha on Wednesday, saying Qatar had failed to honor a Gulf Cooperation Council agreement not to back “anyone threatening the security and stability of the GCC,” an apparent reference to Qatar’s support of Islamist figures.
Doha responded by pledging its commitment to regional security policies and announcing it would not withdraw its own ambassadors, fueling hopes that the dispute could be resolved.
Qatar’s stock market, which fell 2.1 percent Wednesday, rebounded 2.3 percent Thursday, in its biggest one-day gain for six months.
“It’s too early to tell what the medium- to long-term impact will be, but today is a reversal of the knee-jerk reaction to yesterday’s news,” said Amer Khan, senior executive officer at Shuaa Asset Management.
“Historically, disagreements like these did not get publicized and this was a departure from that.”
Many analysts believe it is unlikely that the dispute could escalate to a point where the GCC’s integrity is threatened or where economic sanctions are imposed.
Meanwhile, Saudi Arabia’s bourse rose 1.0 percent to a near six-year high as banking and retail sector shares climbed. Trading volume Wednesday was the highest since May 2012, and it remained high Thursday.
Dubai’s measure also rebounded, rising 1.3 percent after slipping 0.5 percent in the previous session. However, it remained within the range of the last three weeks and appears to have entered a consolidation phase, after seeing spectacular gains since the end of 2012.
Volume this week was the lowest since early November, another sign of waning momentum. In Abu Dhabi, First Gulf Bank fell 4.2 percent as it went ex-dividend. The wider market slipped 0.8 percent.
In Egypt, weak earnings triggered profit-taking, taking the benchmark index down by 0.9 percent, to 7,950 points. The index has struggled to break decisively above 8,000 points since rising above that level on Feb. 23 for the first time in more than five years.
Global Telecom, the Egypt-based group formerly called Orascom Telecom, fell 2.9 percent after its fourth-quarter net loss widened 59 percent. The firm was issued with a multi-million dollar impairment charge after its Canadian business withdrew from a 4G spectrum auction.
“Global weighed on the market and it triggered profit-taking across the board, and the market couldn’t sustain above the 8,000 level,” said Mohamed Radwan, director of international sales at Pharos Securities.