Gulf markets tumbled on Wednesday as investors bet on the U.S. Federal Reserve taking a more aggressive policy stand to tame runaway inflation.
Oil, which fuels the region’s growth, was trading on the back foot as more rate hikes in the United States and elsewhere could slow global economic growth, squeezing oil demand.
Gulf Cooperation Council countries are in the firing line of Fed policy moves as five of them have their currencies pegged solely to the dollar and broadly match U.S. monetary steps, while Kuwait’s dinar is linked to a basket of currencies believed to be dominated by the greenback.
Banking shares took the biggest hit across the markets as higher interest rates could curb lending to businesses and households.
Saudi Arabia’s benchmark index dropped 1.4% as all lenders slipped into negative territory and led other sectors lower.
Gulf markets track oil prices higher, Dubai outperforms
“The Saudi stock market could see more price corrections as sentiment among investors deteriorates,” said Fadi Reyad, market analyst at CAPEX.com MENA. “The market could remain exposed to oil markets and could see some support if they rise.”
Egyptian blue chips lost 1.9% on the wider sell-off, with 27 of 30 stocks pointing lower.
In Qatar, nearly all stocks fell, bringing the index down 1.7%.
The Dubai index shed 0.9%, with heavyweight financial and real estate shares leading the losses.
Abu Dhabi equities slipped 0.2%, snapping their longest winning streak of five days in a month.
The market received some support from Abu Dhabi National Energy Company, which surged 14.6% after Multiply Group acquired a 7.3% stake in the group in a deal amounting to 10 billion dirhams ($2.72 billion).
========================================= SAUDI ARABIA dropped 1.4% to 11,921 ABU DHABI slid 0.2% to 9,969 DUBAI fell 0.9% to 3,427 QATAR shed 1.7% to 13,095 EGYPT lost 1.9% to 10,194 BAHRAIN was flat at 1,939 OMAN lost 0.2% to 4,490 KUWAIT dropped 0.4% to 8,455 =========================================
Comments
Comments are closed.