DUBAI: Stock markets in the Gulf ended mixed on Monday, as growing expectation of a US Federal Reserve interest rate cut this week supported some indexes and weighed on others.
US consumer spending rose moderately in September after three straight months of solid gains, suggesting a loss of momentum in the economy at the end of the third quarter as a lacklustre labour market and rising cost of living curbed demand.
Dovish commentary from several Fed officials has further fuelled expectations of monetary easing.
CME’s FedWatch tool shows markets are pricing in roughly an 88 percent chance of a 25-basis-point rate cut at the Fed’s meeting this week.
The Fed’s stance holds implications for Gulf economies, where most currencies are pegged to the US dollar, making it an anchor for regional monetary stability.
Saudi Arabia’s benchmark stock index eased 0.1 percent, hit by a 0.4 percent fall in oil giant Saudi Aramco and a 3 percent decline in Dar Al Arkan Real Estate Development.
Oil prices - a catalyst for the Gulf’s financial markets - declined on Monday as investors monitored ongoing talks to end the war in Ukraine ahead of an expected US Fed interest rate cut this week.
Crude prices, even after the recent rebound, are still hovering near multi-month lows, putting pressure on the fiscal balances of oil-dependent Gulf nations through lower revenues.
Dubai’s benchmark stock index gained 0.3 percent, with budget airlines Air Arabia advancing 2.2 percent.
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