Home ›› 04 May 2023 ›› Stock

Major Gulf stock markets mixed ahead of Fed decision

Agencies . Dubai
04 May 2023 00:00:00 | Update: 03 May 2023 22:49:29
Major Gulf stock markets mixed ahead of Fed decision

Major stock markets in the Gulf were mixed in early trade on Wednesday, ahead of an expected US interest rate hike later in the day, while the Qatari index advanced on broad-based gains.

In their efforts to tame elevated inflation levels, the US Federal Reserve is expected to hike rates by an additional 25 basis points on Wednesday, while the European Central Bank is also expected to raise rates at its regular policy meeting today, reported Reuters.

Most Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the US dollar and follow the Fed’s policy moves closely, exposing the region to a direct impact from monetary tightening in the world’s largest economy.

Saudi Arabia’s benchmark index (.TASI) dropped 0.8%, dragged down by a 4% slide in Alinma Bank (1150.SE) as the lender missed market expectations for the first-quarter.

Among other losers, oil giant Saudi Aramco (2222.SE) retreated 1.1%.

Oil - a key catalyst for the Gulf’s financial markets - extended losses after plunging 5% in the previous session.

Dubai’s main share index (.DFMGI) was flat. In Abu Dhabi, the index (.FTFADGI) edged 0.1% higher.

An acceleration in the growth of new orders led to a surge in non-oil business activity in the United Arab Emirates in April, a business survey showed on Wednesday.

The UAE, the second-biggest economy among GCC members, will grow 3.7% in 2023 and 4.0% next year, significantly lower than 7.6% last year, according to the latest Reuters poll of 16 economists.

The Qatari benchmark (.QSI) advanced 1.4%, as all the stocks on the index were in positive territory including telecoms firm Ooredoo (ORDS.QA) jumping 4.5%.