Major stock markets in the Gulf were subdued in early trade on Wednesday as investors were cautious ahead of US inflation data, while geopolitical tensions in the region added to the worries.
Data last Friday showed US employers hired more workers than expected in December, dousing expectations of a rapid easing of interest rates and leading market participants to shift attention to US inflation data due on Thursday for more clarity on the trajectory of borrowing costs.
Expectations the US central bank could begin cutting rates as soon as March have decreased, with the CME’s FedWatch Tool showing a 65.7% chance for a cut of at least 25 basis points (bps) for the month, down from 79% a week ago.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by Fed policy because most regional currencies are pegged to the US dollar.
Saudi Arabia’s benchmark index eased 0.1%, hit by a 1% fall in Al Rajhi Bank and a 0.3% decrease in oil giant Saudi Aramco. Meanwhile, Saudi Arabian Mining Company advanced 2.2%.
Major Gulf markets mixed ahead of US inflation data
The kingdom has created a mineral exploration incentive programme with a budget of over $182 million, the country’s minister of industry and mineral resources said at an industry event on Wednesday.
Dubai’s main share index eased 0.1%, weighed down by a 0.5% drop in blue-chip developer Emaar Properties.
The Qatari benchmark dropped 0.2%, with Qatar Islamic Bank losing 0.7% and Commercial Bank retreated 0.7%.
Amid the ongoing Israel-Hamas war, US and UK forces shot down 21 drones and missiles fired by Yemen-based Houthis on Tuesday into the Southern Red Sea towards international shipping lanes, the US military’s Central Command said.
In Abu Dhabi, the index, however, gained 0.2%, helped by a 1.1% rise in the country’s biggest lender First Abu Dhabi Bank.
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