Most stock markets in the Gulf ended lower on Wednesday with the Saudi index posting its biggest intraday fall in two months, as investors worried that further rises in interest rates to quell decades-high inflation would tip economies into recession.

Saudi Arabia’s benchmark index slid 1.4%, its biggest intraday fall since June 30, dragged down by a 4.7% drop in Riyad Bank and a 1.7% decline in oil behemoth Saudi Aramco.

Most Gulf Cooperation Council countries, including the kingdom, have their currencies pegged to the dollar and generally follow the U.S. Federal Reserve’s policy moves, exposing the region to a direct impact from monetary tightening there.

In Qatar, the index retreated 1.4%, extending losses for a third session, as most of the stocks were in negative territory including Commercial Bank, which was down 6%.

Crude prices, a key factor for the Gulf’s financial markets, continued to slide on investor worries about the ailing state of the global economy, bearish oil demand signals from OPEC+ and increased COVID-19 restrictions in China.

Most Gulf bourses in red as oil slide weighs on region

Brent crude futures for October, due to expire on Wednesday, were down $3.41 at $95.90 a barrel following Tuesday’s $5.78 loss.

Dubai’s main share index dropped 0.6%, hit by a 2.2% fall in top lender Emirates NBD.

Gulf banks with exposure to Turkey are expected to make further net monetary losses on their investments in the second half of this year and into 2023, ratings agency Fitch said on Tuesday.

Fitch said Dubai’s Emirates and Kuwait Finance House were the worst-affected when looking at the ratings firm’s core profitability metric, which is operating profit over risk-weighted assets.

The Abu Dhabi index closed 0.9% lower.

Outside the Gulf, Egypt’s blue-chip index fell 1.3%, led by a 3.1% slide in Commercial International Bank.

========================================== SAUDI ARABIA     fell 1.4% to 12,283 ABU DHABI        down 0.9% to 9,875 DUBAI            lost 0.6% to 3,443 QATAR            dropped 1.4% to 13,426 EGYPT            lost 1.3% to 9,999 BAHRAIN          was up 0.1% to 1,918 OMAN             added 0.2% to 4,585 KUWAIT           declined 0.5% to 8,595==========================================