Most stock markets in the Gulf ended lower on Thursday as concern about a global economic downturn overshadowed rising oil prices.
The Federal Reserve this month raised its main interest rate by 50 basis points, its seventh hike of the year. Money managers see the Fed’s tightening campaign as likely to hasten the U.S. economy into recession, which should in turn cause stubbornly high inflation to ease.
Most Gulf Cooperation Council countries, including Saudi Arabia, have their currencies pegged to the U.S. dollar and follow Fed policy moves closely, which exposes the region to monetary tightening in the world’s largest economy.
Saudi Arabia’s benchmark index dropped 0.6% on Thursday, dragged down by a 2% fall in Al Rajhi Bank and a 0.5% decline in Retal Urban Development Co.
The index posted its eighth weekly loss - 0.7% - in nine weeks.
On the other hand, oil giant Saudi Aramco finished 0.3% higher.
Japan Organization for Metals and Energy Security (JOGMEC) has renewed a deal with Aramco for crude oil storage on the island of Okinawa for another three years, the state-run Japanese company said on Thursday.
Major Gulf markets mixed in early trade
In return for providing free storage space to Saudi Aramco, Japan gets a priority claim on the oil stocks in an emergency.
In Abu Dhabi, equities were down 0.3%.
However, the losses were limited by a gain in oil prices. Oil prices - a key catalyst for the Gulf’s financial markets - climbed for a fourth straight day to their highest in two and a half weeks, with U.S. crude, heating oil and jet fuel stocks growing tighter just as a wintry blast hits the United States.
Dubai’s main share index declined 0.5%, hit by a 1.1% fall in top lender Emirates NBD.
Outside the Gulf, Egypt’s blue-chip index finished 0.4% lower, with tobacco monopoly Eastern Company sliding 3.5%.
The Central Bank of Egypt will raise its overnight interest rates by 200 basis points on Thursday as it tries to quell soaring inflation after a sharp devaluation of the currency, a Reuters poll predicted on Tuesday.
======================================= SAUDI ARABIA lost 0.6% to 10,216 ABU DHABI fell 0.3% to 10,313 DUBAI down 0.5% to 3,323 QATAR eased 0.1% to 10,989 EGYPT lost 0.4% to 14,483 BAHRAIN dropped 0.3% to 1,852 OMAN added 0.9% to 4,838 KUWAIT gained 0.1% to 8,010 =======================================
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