Qatar bourse leads declines in Gulf on volatile oil, hawkish Fed fears

Qatar’s stock market led declines in much of the Gulf region on Tuesday amid volatile energy prices, while concerns about a prolonged rate-hiking cycle by the U.S. Federal Reserve kept investors at bay.

Data released on Monday showed U.S. services industry activity unexpectedly picked up in November. After a robust U.S. payrolls report on Friday, that raised doubts about whether the Fed would go for smaller hikes in interest rates just yet.

Most Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the U.S. 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.

In Qatar, the index tumbled 2.6%, underperforming Gulf peers as almost all the stocks on the index fell, including the Gulf’s biggest lender Qatar National Bank, which retreated 4.9%.

The Qatari stock market was hit by sharply lower natural gas prices, which are reacting to expectations of a milder winter, said Farah Mourad, senior market analyst at XTB MENA.

Saudi bourse hits 18-month low on concerns around oil, global economy

“The main index could extend its losses under these conditions,” Mourad said.

Dubai’s main share index dropped 0.4%, ending a three-day winning streak, hit by a 0.9% fall in sharia-compliant lender Dubai Islamic Bank.

In Abu Dhabi, the index finished 0.6% lower, with conglomerate International Holding losing 0.1%.

Crude prices, a key catalyst for the Gulf’s financial markets, fell in a volatile market as a stronger U.S. dollar and economic uncertainty offset the bullish impact of a price cap placed on Russian oil and prospects of a demand boost in China.

Saudi Arabia’s benchmark index, which is trading around 18 month lows, bucked the trend to close 0.2% higher, helped by a 1% rise in Al Rajhi Bank.

Outside the Gulf, Egypt’s blue-chip index advanced 1.2%, gaining for a sixth session as local investors continue to flock to the bourse.

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 SAUDI ARABIA    rose 0.2% to 10,444
 ABU DHABI       fell 0.6% to 10,408
 DUBAI           down 0.4% to 3,340
 QATAR           slid 2.6% to 11,617
 EGYPT           up 1.2% to 14,498
 BAHRAIN         eased 0.2% to 1,858
 OMAN            lost 0.1% to 4,658
 KUWAIT          dropped 2% to 8,278
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