Gulf stocks mixed on rate hike jitters

Equity markets in the Gulf opened mixed on Thursday after the US Federal Reserve Chair’s hawkish stance on higher and faster interest rates dampened investor sentiment.

Aggressive rate hikes may pose challenges for the Gulf economy as most Gulf Cooperation Council (GCC) countries have their currencies pegged to the dollar and generally follow the Fed’s policy moves, exposing them to any monetary tightening.

Gulf markets, which are highly sensitive to changes in oil prices, were mostly trading on the back foot after tepid growth data from China and on worries that higher interest rates in the United States could slow global economic growth, squeezing oil demand, reported Reuters.

In Abu Dhabi, the benchmark index (.FTFADGI) slipped 0.7%, its third straight day of decline, dragged down by a 2.9% slide in top lender First Abu Dhabi Bank (FAB.AD).