Major stock markets in the Gulf were mixed in early trade on Thursday, as investors weighed risks of a global recession ahead of US inflation data and amid hawkish rhetoric from Federal Reserve officials.
Fed officials agreed they needed to raise interest rates to a more restrictive level - and then maintain them there for some time - to meet their goal of lowering “broad-based and unacceptably high” inflation, a readout of last month’s policy meeting showed on Wednesday.
Most Gulf Cooperation Council countries, including Saudi Arabia, United Arab Emirates and Qatar, 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 stock index eased 0.2%, dragged down by a 0.8% fall in Dr Sulaiman Al-Habib Medical Services and a 0.6% drop in oil giant Saudi Aramco.
Oil prices, a key catalyst for the Gulf’s financial markets, struggled to find a footing after easing in the previous session on a weakening global demand outlook.
Both OPEC and the US Energy Department have cut their demand outlooks, while a flare-up in COVID-19 cases in China has sparked fresh concerns over fuel consumption in the world’s top crude importing-country.
Saudi Arabia rejected as “not based on facts” statements criticising the kingdom after an OPEC+ decision last week to cut its oil production target despite US objections, saying it serves the interests of both consumers and producers.
Gulf bourses track global shares, oil prices lower
In Qatar, the stock index dropped 0.2%, with Qatar Islamic Bank losing 0.7%.
Separately, Qatar Airways is boosting its workforce by 10,000 to handle an influx of passengers flying into Doha for the soccer World Cup and in line with a broader post-pandemic expansion, Reuters reported, citing the airline.
Dubai’s main share index added 0.2%, helped by a 1.5% rise in Emirates NBD Bank.
In Abu Dhabi, the index firmed 0.1%, with the country’s biggest lender First Abu Dhabi Bank rising 0.1%.
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