DUBAI: Stocks in the Middle East broadly rose on Wednesday, extending their comeback from an aggressive sell-off in global stocks earlier in the week driven in part by fears of a possible US recession.
Stock markets in Saudia Arabia, Dubai and Abu Dhabi all ended the day higher as shares in Europe and Asia also rose.
Share price gains in Asia were led by a bounce in the Nikkei, as the Bank of Japan unexpectedly turned cautious on rate hikes amidst market volatility.
Some investors also reassessed the outlook for the US economy after Federal Reserve policymakers pushed back late on Monday against the notion that weaker-than-expected July jobs data means that the economy is in a recessionary freefall.
Markets are pricing in a 65% chance of the Fed cutting interest rates by 50 basis points in September, the CME FedWatch tool shows, compared with 85% a day ago.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed’s decisions as most regional currencies are pegged to the US dollar.
Saudi Arabia’s benchmark index closed 0.4% higher, with oil giant Saudi Aramco rising 2%.
Aramco will buy from Japan’s Sumitomo Chemical a 22.5% stake in their petrochemical joint venture Petro Rabigh for $702 million, the companies said on Wednesday, outlining a turnaround strategy for the loss-making venture.
Petro Rabigh shares soared 10%.
Dubai’s main share index advanced 1.5%, led by a 2.9% rise in blue-chip developer Emaar Properties.
Meanwhile, Dubai’s main airport is on track to handle a record number of passengers this year after an 8% year-on-year increase in the first six months, operator Dubai Airports said on Wednesday.
In Abu Dhabi, the index finished 1.1% higher.
The Qatari benchmark added 0.3%, with Islamic lender Masraf Al Rayan increasing 1.3%.
Outside the Gulf, Egypt’s blue-chip index rose 1.5%, with Talaat Mostafa Group gaining 4%. Egypt’s remittances from its overseas workers reached $7.5 billion in the April-June quarter, up from $4.6 billion a year earlier, the Central Bank of Egypt said on Wednesday.
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