Shares on the Saudi stock exchange reversed course to close lower as it started the month on a shaky note amid volatile oil prices, while Qatar stocks rallied for the third straight session on Thursday.

Crude oil, a key catalyst for the Gulf’s financial markets, was down in Asian trade on Thursday but later gained about $1 a barrel, supported by the potential for OPEC+ to cut supply further and as easing COVID-19 curbs in China raised the likelihood of higher demand from the world’s top crude importer.

Fed Chair Powell said on Wednesday the U.S. central bank could scale back the pace of interest rates hikes “as soon as December”, though he still cautioned the fight against inflation was far from over.

Most Gulf Cooperation Council countries have their currencies pegged to the dollar and generally follow the Fed’s policy moves, exposing the region to a direct impact from any monetary tightening by the Fed.

Saudi Arabia’s benchmark index gave up its morning gains to close 0.7% lower, pressured by its banking and energy shares.

Saudi British Bank fell nearly 5%, while oil behemoth and index heavyweight Saudi Aramco was down 1.2%.

However, Sahara International Petrochemical gained 5.7% after announcing a 1.50 riyals per share cash dividend for the second half of 2022.

Major Gulf markets track Asian shares, oil prices lower

The Qatari benchmark index advanced 0.8%, extending gains for the third straight session, with petrochemicals maker Industries Qatar and telecom operator Ooredoo surging 3.6% and 5.3%, respectively.

Outside the Gulf, Egypt’s blue-chip index rose 2.9%, helped by a 6.5% increase in the country’s lone cigarette maker Eastern Co.

Separately, Egypt expects its economy to grow almost 5% by the end of the fiscal year 2022/23, its planning ministry said on Wednesday.

The markets in the United Arab Emirates are closed for a public holiday and will reopen on Friday.

========================================= SAUDI ARABIA    fell 0.7% to 10,823 QATAR           gained 0.8% to 12,018 EGYPT           advanced 2.9% to 13,640 BAHRAIN         was flat at 1,865 OMAN            flat at 4,614 KUWAIT          lost 0.4% to 8,461=========================================