DUBAI: Stock markets in the Gulf ended mixed on Monday, driven by underwhelming corporate earnings and diminished expectations for further Federal Reserve rate cuts in December.
The US Fed cut interest rates by 25 basis points for the second time this year on October 29, but Chair Jerome Powell’s hawkish comments afterward cast doubt on the likelihood of further rate cuts in 2025.
Traders now assign a 71 percent probability to a rate cut in December, down from more than 90 percent earlier, according to CME’s FedWatch Tool.
US monetary policy shifts have a significant impact on Gulf markets, where most currencies are pegged to the dollar. Saudi Arabia’s benchmark index fell 0.5 percent, hit by a 4.8 percent slide in renewable energy utility firm ACWA Power Company, as the company failed to meet quarterly profit forecasts.
Among other decliners, petrochemical maker Saudi Basic Industries Corp (SABIC) retreated 1.8 percent, on course to extend losses, a day after reporting a steep fall in third-quarter profit.
The market could remain under pressure as investors take into account the potential for slower market reforms on foreign ownership, said Joseph Dahrieh, managing principal at Tickmill.
“Additionally, low oil prices could remain a source of risk for the market, although it could stabilize after OPEC’s decision to halt production increases in the first-quarter next year.”
However, Arabian Drilling advanced 2.2 percent, despite turning to losses in third-quarter.
Dubai’s main share index dropped 0.7 percent, with blue-chip developer Emaar Properties losing 1.8 percent.