Most major Gulf equities were subdued in early trade on Wednesday, ahead of the US Federal Reserve’s policy meeting, with many fearing a drastic action would risk tipping the world into recession.
Investors have dramatically raised their bets that the Fed will raise interest rates by 75 basis points (bps) rather than 50 bps on Wednesday, a swing in expectations that has fuelled a violent selloff across world markets.
In Abu Dhabi, the index lost 0.3%, hit by a 1.2% fall in telecoms firm Emirates Telecommunications Group and a 0.1% decrease in the country’s biggest lender First Abu Dhabi Bank. Dubai’s benchmark index eased 0.2%, with blue-chip developer Emaar Properties losing 1.8%.
The Qatari index retreated 0.5%, weighed down by a 3% fall in Commercial Bank. Saudi Arabia’s benchmark index, however, bucked the trend to trade 0.6% higher, with Al Rajhi Bank rising 0.7% and Banque Saudi Fransi advancing 2.4%.
Gulf bourses in red on inflation, fuel demand concerns
Oil prices, a key catalyst for the Gulf’s financial markets, edged up after the Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecast that world oil demand will exceed pre-pandemic levels in 2022.
Saudi Arabia’s consumer price index rose 2.2% in May from a year earlier, government data showed on Wednesday, slowing from a 2.3% pace in April.
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