End-of-week profit-taking ended rallies in the Qatar stock market on Thursday, while strong economic data and plans to cut fuel subsidies lifted investors’ mood in Egypt.

Qatar, which had jumped 7.8 per cent in the same period, slipped 0.1 per cent on Thursday. Islamic lenders, which had led the brief rally, became the main drags on the index.

Shares in Masraf Al Rayan fell 2.3 per cent, Qatar Islamic Bank (QIB) edged down 1.6 per cent and Qatar International Islamic Bank (QIIB) slipped 0.7 per cent.

Sharia-compliant banking stocks have greatly outperformed conventional lenders in Qatar this year: Masraf Al Rayan is up 60 per cent, QIIB 34 per cent and QIB 33 per cent, while conventional banks’ gains are in the single digits and Doha Bank is down 2 per cent.

At the same time, asset growth rates of Islamic banks have dropped to just above those of their conventional peers, cutting a large lead which the industry previously held. Islamic banking assets in Qatar grew 12.2 per cent in 2013, down from 35.1 per cent in 2011.

As a result, many analysts surveyed by Thomson Reuters consider the stocks overvalued. Masraf Al Rayan, in particular, closed at 50.30 riyals on Thursday, 43 per cent above its median price target of 35.15 riyals.

Elsewhere, Egypt’s bourse rose 1.4 per cent after a survey showed that business activity grew in June after three months of contraction.

“The PMI (purchasing managers index) has reached a six-month high today, that’s one of the reasons,” said Harshjit Oza, assistant director of research at Naeem Holding in Cairo.

Another positive factor was the government’s plan to raise prices on most petroleum products, he said. Raising energy prices by cutting subsidies could be the first economic policy test for new President Abdel Fattah al-Sisi, who must improve state finances and revive an economy battered by more than three years of political turmoil.

Elsewedy Electric, the Arab world’s biggest listed cable maker, rose 3.6 per cent after winning a government tender to build six wind power stations.