Major stock markets in the Gulf rose in early trade on Thursday after the US Federal Reserve’s rate pause and policy commentary led to hopes of an end to further rate hikes.
The Fed held interest rates steady on Wednesday as policymakers struggled to determine whether financial conditions may be tight enough already to control inflation, or whether an economy that continues to outperform expectations may need still more restraint.
While Chair Jerome Powell did not rule out another hike, markets judged he was not quite as hawkish as he might have been.
Most Gulf Cooperation Council countries, including the UAE, peg their currencies to the US dollar and follow the Fed’s policy moves closely.
Saudi Arabia’s benchmark index advanced 1%, with Elm Co gaining 1.8%, while Saudi Basic Industries Corp (SABIC) jumped more than 4% despite reporting quarterly loss.
SABIC, one of the world’s biggest petrochemical companies, reported a net loss of 2.88 billion riyals ($768 million) for the three months to Sept. 30, compared with a profit of 1.84 billion riyals a year earlier.
Elsewhere, Mouwasat Medical Services Co added 1.4% following a sharp rise in quarterly profit.
Most Gulf markets gain ahead of Federal Reserve rate decision
Dubai’s main share index rose 0.5%, with Emirates Central Cooling Systems increasing 1.2%.
The United Arab Emirates’ gross domestic product grew 3.7% in the first half of the year, the economy minister said on Wednesday, as non-oil sector growth vastly outperformed overall growth. In Abu Dhabi, the index was up 0.5%.
Oil - which fuels the Gulf economy - gained 1% to snap its three-day decline, as risk appetite returned to financial markets after the US Federal Reserve kept benchmark interest rates on hold.
The Qatari benchmark climbed 1.4%, as most of the constituents on the index were in positive territory including Qatar Islamic Bank, which was up 1.9%.
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