Omani stock market continues to trade sideways

Muscat: The Omani stock market continued to see strong volatility this week but remained in an uncertain direction, trading mostly sideways, according to an industry analyst.

“The main index maintained the same trend since the beginning of July after it recorded wider swings and more pronounced directions during the first half of the year,” said Daniel Takieddine, BDSwiss CEO MENA.

Improving trading volumes compared to the last few weeks could help stir the main index away from its current trend and toward a more consistent direction, he said.
Despite the volatility, the financial sector was able to remain in positive territory. “Banks could benefit in the coming weeks if financing costs remain stable, loan growth stays strong and the local economy supports a positive sentiment,” Daneil said.

Current global uncertainties could continue to impact the Omani stock market’s direction. Traders have been monitoring the developments in energy markets in particular in addition to the changing expectations regarding monetary policy in the US.

“This week, attention was centred around the speech from Jerome Powell, the Federal Reserve’s president,” Daneil added.

Jerome Powell reiterated the Federal Reserve’s goal to pull inflation down to 2 percent and that the necessary measures would be put in place in this regard. The Federal Reserve could raise or leave interest rates elevated if required, impacting investors’ sentiment and potentially pressuring Oman's economy.

Alternatively, sentiment was somewhat positive this week in the US stock market thanks to the optimistic expectations for AI growth. In this regard, Nvidia surpassed forecasts. The ensuing enthusiasm could spill over to other stock markets globally and could help fuel some risk appetite.

However, concerns about the state of the global economy re-emerged after a series of economic data releases in the US and Europe in particular. Services and manufacturing activity levels continued to decline in major European economies with some deterioration as well as in the US.

Declining economic activity has also affected oil markets which have been retreating this week before recovering to a certain extent. “Oil markets’ performances could continue to see risks and volatility as traders’ concerns shift between demand and supply issues. A fall in crude prices could affect sentiment on the Omani stock market,” Daneil said.

Traders’ attention could turn next to the economic data releases in the US next week with key figures on inflation potentially affecting monetary policy expectations and risk appetite. US job market data as well as gross domestic product (GDP) figures could also affect oil prices and overall sentiment.