Hopes of a slowing U.S. rate increase helping Gulf stocks to gain
The stock markets in Saudi Arabia, Qatar and Qatar began the month on Thursday on a positive note. Both indexes gained to a third session on Thursday after investors put their hopes on a slowdown of U.S. Federal Reserve monetary tightening.
Jerome Powell, Fed Chair, said that the U.S. central banks could reduce the pace of interest rate increases “as soon December,” but warned that the fight against inflation is far from over.
The majority of Gulf Cooperation Council (GCC) countries have their currencies pegged at the dollar. They also follow the Fed’s policy moves. This exposes the region to any monetary tightening by the Fed.
Investors around the world are also placing their hopes on lower U.S. rates hikes. This is fueling optimism about an economic recovery that will be faster than expected.
Crude prices, which are a key driver for the Gulf’s financial market’s financial markets, fell in Asian trade ahead of Sunday’s OPEC+ Meeting. However, COVID-19 curbs were eased at China’s largest crude importer and this capped the drop.
Saudi Arabia’s benchmark (.TASI) was marginally higher at 0.1% in morning trading after it posted its monthly loss for November.
After announcing a 1.50 rupel per share cash dividend, Sahara International Petrochemical (2310.SE), jumped 4.6%
Saudi Aramco (2222.SE), a huge oil producer and index heavyweight, fell 0.5%.
Qatar’s benchmark index (.QSI), gained 0.5%, with petrochemical manufacturer Industries Qatar (IQCD.QA), gaining almost 1.6%.
The Kuwait benchmark (.BKP), fell 0.1%, and Boubyan Bank(BOUK.KW), fell 0.8%.
** Markets in the United Arab Emirates will reopen Friday after a public holiday.