However, the falls were more of a retreat after Qatar’s main stock index rose around 14% over the past three months in anticipation of its arrival into the developing nations index.
On Thursday morning the Qatar stock index had fallen nearly 1% adding to the sharp fall of 2.9% recorded on Wednesday, which was its biggest one-day drop since January.
Nick Wilson, chairman of the Qatar Investment Fund said further profit taking was possible given the run up in ahead of the announcement which has seen over $200m (£151.9m, €179.5m) of net inflows into the market from other Gulf Cooperation Council (GCC) nations and foreign institutions.
“Technically the market is a bit ahead of itself so we can expect some volatility until the new index is effective,” he said.
The FTSE Russell announcement was also not the only factor affecting the Qatar Stock Exchange (QSE) with the sharp fall in oil prices another factor affecting sentiment.
On Wednesday, oil fell sharply following the latest US crude stockpile data. The US crude price tumbled 3.56% to post it biggest daily decline since July 13th and in the process closed below $45/bbl for the first time in three weeks.
The formal re-classification of Qatar to Secondary Emerging from Frontier will be completed when markets open for business on 20 September. Qatar has already been upgraded to emerging markets by MSCI and Standard & Poor’s-Dow Jones.
The Qatari companies eligible for the FTSE Secondary Emerging Market Index are: Aamal, Al Meera Consumer Goods Company, Barwa Real Estate, Commercial Bank of Qatar, Doha Bank, Ezdan Holding Group, Gulf International Services, Industries Qatar, Masraf Al Rayan, Medicare Group, Ooredoo, Qatar Electricity & Water Co., Qatar Gas Transport, Qatar Insurance, Qatar International Islamic Bank, Qatar Islamic Bank, Qatar National Bank, Qatar Navigation, Qatari Investors Group, Salam International Investment, United Development Company and Vodafone Qatar.