DUBAI: Most stock markets in the Gulf rebounded on Tuesday, with the Saudi index snapping a four-day losing streak, as investors price in bets of a super-sized Federal Reserve interest rate hike later this week.
The Federal Reserve is likely to raise US borrowing costs faster and further than previously expected after data last week showed underlying inflation broadening out rather than cooling as expected.
Most Gulf Cooperation Council countries, including Saudi, have their currencies pegged to the dollar and generally follow the Fed’s policy moves, exposing the region to a direct impact from monetary tightening there.
Saudi Arabia’s benchmark index rose 0.5%, ending four sessions of losses, bolstered by a 2.3% rise in the kingdom’s biggest lender Saudi National Bank.
Dubai’s main share index gained 0.7%, led by a 1.6% rise in blue-chip developer Emaar Properties and a 1.3% advance in sharia-compliant lender Dubai Islamic Bank .
In Abu Dhabi, the index added 0.4%, helped by a 1% gain in International Holding Co, after the conglomerate said it decided to acquire a 15% stake in Burjeel Holdings through a unit.
The Qatari index finished 0.6% higher, with petrochemical maker Industries Qatar climbing 2%.
Crude prices, a key catalyst for the Gulf’s financial markets, ticked up as OPEC and its allies produce less than their quotas, but were headed for a fourth monthly decline ahead of the expected US interest rate hike which may curb economic growth and fuel demand.
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