Saudi Arabia’s inflation rate fell to its lowest in almost three years as increases in the costs of food eased.
Inflation slowed to 4 per cent in July, compared with 4.9 per cent in the previous month, the Central Department of Statistics said on its website on Sunday. Food prices increased 4 percent, down from 4.7 per cent in June.
The Saudi Arabian Monetary Agency said in a report on its website that inflationary pressures in the kingdom, the Arab world’s largest economy, are expected to stabilise in the third quarter as global increase in food costs slow and inflation in other countries eases.
Saudi Arabia’s index advances to a fresh 11-week high, boosted by food stocks, but volumes slump as investors wind down ahead of the upcoming Eid holiday. The bourse rises 0.1 per cent to 6,995 points, its highest close since May 29.
The gain is fuelled by food-related companies, with the agriculture and food index rising 2.1 per cent. Dairy firm Almarai climbs 2.4 per cent and Savola Group jumps 2.9 per cent. The conglomerate is at its highest level in at least two years.
However, the number of shares traded on the bourse-just short of 163 million -is the third-lowest of any session in 2012.
Investors will be cutting positions as the retail-dominated market closes for a long holiday at the end of the week to mark Eid. Retail investors usually cash-out on holidays, preferring to hold cash over stocks.
Kuwait’s bourse drops to an eight-year closing low as the country’s political crisis worsens and the index breaks a critical resistance level to raise the prospect of a free fall in coming days.
Kuwait’s index slips 0.4 per cent to 5,679 points, its lowest close since August 2004.
The index broke through the support level near 5,680 points, the previous multi-year low hit on Jan.9.
“Overall, the market outlook is bearish to oversold,” Global Investment House says in a note. Investment strategy for medium-term 11-week and long-term—50 weeks investors is to enter the market at levels higher than 5,910 point and 6,050 point, respectively, it adds.
Trading volumes generally have lessened as investors interest in the market fades but small-caps suffered declines.
In the United Arab Emirates, the twin bourses end mixed as investors book recent gains in Dubai, which hit a three-month high last on Sunday. The emirate’s measure slips 0.3 per cent to 1,568 points, down for a fourth session in the last five.
Air Arabia sheds 3 per cent, logistics firm Aramex dips 2.2 per cent and Drake and Scull loses 1.4 per cent.