Monday, March 4, 2024

Most Gulf stock markets rose after signs of an imminent U.S. central bank rate hike


© Reuters. A man stands at the Dubai Stock Exchange in a photo from the Reuters archive

From Atiq Sharif

Dec 14 (Reuters) – Most stocks in the Gulf ended higher on Thursday, as the Federal Reserve gave signs that the end of its monetary tightening cycle may be near and followed through on dovish words for next year.

The U.S. Federal Reserve kept interest rates unchanged on Wednesday, with Chairman Jerome Powell suggesting an end to unprecedented monetary tightening as inflation eased faster than expected.

Monetary policy in the six Gulf Cooperation Council countries is generally guided by Federal Reserve decisions, as most of the region’s currencies are pegged to the dollar.

It rose 1.2 percent, Al Rajhi Bank shares (Tadaul: ) rose 3.6 percent and Elm Company shares rose 1.9 percent. Shares in oil giant Aramco (Tadaul: ) also rose 0.3 percent.

Oil prices, a key driver of financial markets in the Gulf, rose and extended their gains from the previous session, as stocks from US crude stockpiles fell sharply on a weekly basis and the US Federal Reserve signaled it would cut interest rates for the year.

Dubai’s main stock index rose 1.1 percent, led by a 2.3 percent gain in Emaar Properties ( DFM: ) and a 3.3 percent gain in Dubai Electricity and Water Authority ( DEWA ).

In Abu Dhabi, the index rose 0.4 percent.

Abdul Hadi Al-Labi, chief marketing officer at Gamma Capital, said the Abu Dhabi stock market recorded a positive performance, benefiting from a shift in sentiment and recovery.

But, he said, oil prices “may still be a source of risk for the market, while currently on a downward trend.”

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The Qatari index closed 1.9 percent higher, ending the last session’s streak of gains, ending an eight-day losing streak.

Most stocks, such as Qatar Islamic Bank, rose 2.9 percent.

According to Al-Abi, the change in global sentiment helped pull the Qatari stock market out of its current downtrend. However, there may be some risks depending on developments in the energy markets, which will continue to expose us to downside risks.

Outside the Gulf region, the leading stock index fell 0.2 percent, weighed down by shares of Commercial International Bank ( EGX: ) which fell 0.7 percent.

(Prepared by Rehab Ala for Arabic Bulletin – Editing by Salma Nekhm)

Nadia Barnett
Nadia Barnett
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