Major stock markets in the Gulf opened higher on Tuesday, as easing recession fears and expectations of a less-aggressive rate hike from the US Federal Reserve improved risk appetite.
The US Fed will end its tightening cycle after a 25-basis-point hike at each of its next two policy meetings and then likely hold interest rates steady for at least the rest of the year, according to most economists in a Reuters poll.
Most Gulf currencies are pegged to the US dollar, while Qatar, Saudi Arabia and the United Arab Emirates usually mirror any monetary policy change in the world’s largest economy.
Dubai’s main share index gained 0.3%, strengthened by banking stocks as Islamic lender Dubai Islamic Bank rose 1.4%, while real estate heavyweight Emaar properties added 0.5%.
Saudi Arabia’s benchmark stock index edged 0.2% higher, supported by energy shares and financials, as oil behemoth and index heavyweight Saudi Aramco and the world’s largest Islamic lender Al Rajhi Bank gained 0.5% each.
Crude price - a key catalyst for Gulf’s financial markets - drifted lower on Tuesday, easing from last week’s gains on expectations of fuel demand recovery in the world’s top importer China.
The benchmark stock index in Qatar opened 0.2% higher, supported by petrochemical and banking shares, as petrochemical maker Industries Qatar and Islamic lender Qatar Islamic Bank jumped 0.7% and 0.5%, respectively.
Major Gulf stocks rise on higher oil prices
Among other stocks, Aamal Company rose 4.6% after the firm’s unit won a contract worth 1.2 billion Qatari riyals ($329.67 million) with Kahramaa.
Abu Dhabi’s benchmark index hiked 0.2%, on course to break a four-session losing streak, as real estate developer Aldar Properties jumped 1.3% and Adnoc’s retail unit Adnoc Distribution gained 0.9%.
Separately, overall growth in the six GCC economies was forecast to average 3.3% and 2.8% this year and next respectively, the Jan. 9-23 poll showed, down from 4.2% and 3.3% in the previous poll.
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