Monday, July 22, 2024

Most Gulf stock markets tumbled as the dollar, oil and gold fell

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Most Gulf stock markets tumbled as the dollar, oil and gold fell

Most Gulf stock markets fell, and the U.S. dollar, gold and oil indices fell, while Eurozone bond yields rose, with U.S. yields hitting their highest level in 15 years.

In the Gulf, most stock markets ended lower as investors were disappointed by recent stimulus measures in China, and Qatar’s index suffered the biggest losses.

China’s central bank cut its one-year lending rate by 10 basis points to its five-year benchmark, surprising analysts who had expected a 15 basis point cut for both.

Qatar’s index fell more than 1% as most stocks fell in the index, including Qatar Islamic Bank, which fell 2.1%. The Saudi index pared its early gains to a 0.8% decline, and oil major Saudi Aramco fell 1.6%.

The Abu Dhabi index fell 0.3%. However, the Dubai index bucked the general trend, registering a 0.1% gain, while shares of the emirate’s largest bank, “Emirates NBD Bank”, gained 1.2%.

Brent crude futures were down 34 cents, or 0.4%, at $84.46 a barrel, while U.S. crude futures were down 53 cents, or 0.65%, at $80.72.

dollar and major currencies

In the foreign exchange market, the dollar retreated to a two-month low today after five consecutive weeks of gains as risk in Europe improved.

The dollar index, which measures the U.S. currency against six other major currencies, fell 0.2% to 103.18 in recent trade, but it is nearing its two-month high of 103.68 hit last Friday.

The Australian dollar hit $0.642, and the New Zealand dollar hit $0.5926, nearing 9-month lows they hit last week.

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The yuan fell above 7.3 to the dollar before moving higher. The euro was up 0.3% at $1.0906 and the British pound was slightly higher at $1.2756. The Swiss franc rose to 0.8793 against the dollar last week, hitting a 6-week low.

The Russian ruble also fell below 94 against the dollar, but its trade saw relative stability after one of the most volatile weeks of the year, leading to a recovery after a sudden 12% interest rate hike broke the $100 mark.

Russia’s central bank raised interest rates by 350 basis points after the ruble hit a 17-month low of 101.75 per dollar on Monday. The currency touched a two-week high of 92.55 on Thursday.

More European and US bonds

In addition, yields on government bonds in the eurozone rose sharply on Monday, with US Treasury yields rising to a 10-year high and a 15-year high, supported by expectations of continued interest rate hikes over the long term.

US 10-year Treasury yields rose to 4.35%, adding upward pressure on eurozone bond yields.

Germany’s 10-year Bund yield rose 8 basis points to 2.7% on the day, from 2.729% last week, its highest level since hitting 2.77% in early March.

Italian 10-year bond yields rose nearly seven basis points to 4.39%.

Data released earlier in the day showed producer prices in Germany fell more than expected in July, primarily due to lower energy prices.

The German central bank has forecast that Europe’s largest economy will return to relative stagnation in the current quarter.

Germany’s GDP stagnated in the second quarter after falling in the previous two quarters as the country was hit by rising energy prices, high borrowing costs and the weak performance of the economy of China, Germany’s main trading partner.

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Gold and precious metals

In the metals market, gold hit a 5-month low on Monday as higher Treasury yields pressured the yellow metal, as investors focused on this week’s meeting of central bankers in Jackson Hole, Wyoming. Expectations for the economy and interest rates.

Gold was down 0.1% at $1887.09 an ounce in spot trading by 14:29 GMT. US gold futures remained flat at $1916.

The 10-year U.S. Treasury yield rose to 4.3379%, the highest level since October.

Gold fell to its lowest level since mid-March, hitting $1883.7 last week, after optimistic economic data boosted bets that US interest rates will continue to rise for a longer period of time.

As for other precious metals, silver spot contracts were up 1.1% at $22.94, platinum was down 0.5% at $905.48 and palladium was down 1.8% at $1233.1.

Global stock indices

The US “Nasdaq” index rose more than 1% today Monday, the “Standard & Poor’s” index rose 1.9%, while the “Dow Jones” industrials fell 0.25%.

European shares rose in late trade, with gains in energy and mining stocks and gains in global commodity prices ending a four-day losing streak, while Danish pharmaceuticals (Novo Nordisk) eked out gains in the healthcare sector.

The European STOXX 600 index rose 0.1% and rose 0.9% during intraday trading. It closed at a 6-week low on Friday.

The Japanese “Nikkei” index ended higher, ending a 0.37% trading gain, ending a 3-day losing streak. The broad topics index rose 0.17%.

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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