Major stock markets in the Gulf were mixed in early trade on Thursday as recession fears grew in United States. US consumer confidence dropped to a nine-month low in April as worries mounted, heightening the risk of the economy falling into recession this year.
Saudi Arabia’s benchmark index dropped 0.3%, on course to snap a six days of gains, with Al Rajhi Bank losing 1.7%.
The bank reported profits that were lower than last quarter although higher than the same period a year ago.
Investors are also worried that further potential interest rate hikes by inflation-fighting central banks could slow economic growth.
Gulf markets put in mixed performance on recession fears
Most Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the US dollar and follow the Fed’s policy moves closely, exposing the region to monetary tightening in the world’s largest economy.
In Abu Dhabi, the index gained 0.5%.
Oil prices - a key catalyst for the Gulf’s financial markets - rose slightly, finding some support after heavy losses in the previous two sessions driven by fears of a US recession and an increase in Russian oil exports which dulled the impact of OPEC production cuts.
Dubai’s main share index added 0.4%, with its top lender Emirates NBD rising 1.9%.
Separately, the United Arab Emirates is selling 1.1 billion dirhams ($299.6 million) of Islamic bonds denominated for the first time in the local currency, state news agency WAM said, a move aimed at deepening the country’s Islamic finance markets.
The Qatari index eased 0.1%, with Doha Bank declining about 4% after posting a decline in first-quarter profit.
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