August 29, 2017 / 5:33 AM / a year ago

MIDEAST STOCKS-Gulf to be sluggish but FTSE hopes may support Saudi, Kuwait

DUBAI, Aug 29 (Reuters) - Gulf stock markets look set to remain sluggish on Tuesday although hopes for inflows of foreign funds into Saudi Arabia and Kuwait may support those two bourses.

MSCI’s broadest index of Asia-Pacific shares outside Japan is down 0.7 percent and S&P mini futures have dropped almost as much, implying a lower opening for Wall Street, after North Korea fired a missile over northern Japan. Brent oil is little changed around $52.0 a barrel.

Low trading volumes in Gulf markets ahead of Eid al-Adha holidays that start later this week show many investors have already left the market. Daily traded volume in Dubai on Monday was the lowest since September 2015.

However, some investors in Saudi Arabia and Kuwait have been buying stocks before index compiler FTSE decides late next month whether to add those markets to its secondary emerging market index.

The index changes would probably not begin until late 2018, and the size of foreign fund inflows would not be huge, so investors may already be giving too much weight to this factor. However, in the absence of other factors, FTSE hopes may continue to affect trade. (Reporting by Andrew Torchia)

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