0530 GMT - Egypt's bourse may fall sharply on Sunday after security forces shot dead dozens of supporters of ousted president Mohamed Mursi, escalating the country's political crisis.
Thousands of Muslim Brotherhood supporters were hunkered down in a vigil at a Cairo mosque on Sunday, vowing to stand their ground despite a threat by the authorities to disperse them "soon".
After surging 20 percent from its late June low, the stock market started to pull back late last week because of concern about the possibility of violence at the weekend.
Although it bounced from Thursday's lows, showing bargain-hunting interest, fresh buying may be deterred by the prospect that the military-backed government's aggressive stance towards Mursi supporters may backfire, leading to protracted conflict rather than an end to street protests.
The stock index, which ended Thursday at 5,353 points, has initial technical support at the July 8 low of 5,123 points; any clean break below that level would trigger a double top pointing down to around 4,800.
The fresh violence could push the U.S. government to take a stance on whether the ousting of Mursi was a coup or not, endangering over $1 billion a year in U.S. military aid to Egypt. Aid from some other international bodies such as the European Union may also be hit.
KUWAIT ELECTIONS
In Kuwait, citizens voted for the sixth time in seven years on Saturday in a parliamentary election boycotted by the main Islamist and populist opposition. Results are expected in coming hours.
Investors are generally optimistic that, partly because of a partial opposition boycott, the election will produce a parliament willing to cooperate with the government on long-delayed economic development plans. Any confirmation of this could boost stock prices.
In the United Arab Emirates, Dubai-listed construction firm Arabtec could fall after its rights issue of 1.56 billion new shares at 1.50 dirhams each; the new shares will start trading on Sunday.
Arabtec said in early July that its 2.4 billion dirham ($653 million) rights issue was nearly 30 percent oversubscribed. The stock last closed at 2.25 dirhams, leaving considerable room for investors who bought in the rights issue to start taking profits.
Global cues for the markets are mixed. The U.S. dollar fell to a five-week low on Friday on expectations that the Federal Reserve will underline its intention to keep interest rates low for a long time at its upcoming policy meeting.
U.S. stocks managed to recover late in the day to end with a slim gain, but oil slipped on worries about falling demand in China. (Reporting by Nadia Saleem; Editing by Andrew Torchia)
Source: http://news.yahoo.com/stocks-news-mideast-egypt-may-fall-sharply-kuwait-055255073.html
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