DUBAI: Most stock markets in the Gulf ended lower on Sunday after hawkish Federal Reserve officials dimmed hopes for a December interest rate cut.
The record-long US government shutdown that concluded on Thursday has generated a significant data void, leaving the Federal Reserve and market participants without key insights ahead of the upcoming policy meeting.
Traders had anticipated new figures revealing economic deceleration, which could provide the Fed with justification for a December rate reduction.
Such hopes dimmed after an increasing number of Fed officials adopted a more cautious stance on further easing, citing stubborn inflation and a resilient labor market despite two rate cuts this year.
Market expectations for a 25 basis-point rate cut next month fell to nearly 46 percent, from 50 percent earlier this week, CME Group’s FedWatch tool showed.
Monetary policy shifts in the US have a significant impact on Gulf markets, where most currencies are pegged to the dollar.
Saudi Arabia’s benchmark index dropped 1.1 percent, hit by a 0.7 percent fall in Al Rajhi Bank and a 1.3 percent decrease in Saudi National Bank - the country’s biggest lender by assets.
Elsewhere, oil behemoth Saudi Aramco retreated 1.1 percent.
In Qatar, the index tumbled 1 percent, as almost all its constituents were in negative territory, including petrochemical maker Industries Qatar, which was down 2.3 percent.
Outside the Gulf, Egypt’s blue-chip index advanced 2.5 percent to hit record highs, ending a four-session losing streak, boosted by a 11.9 percent surge in Telecom Egypt following a sharp rise in third-quarter profit.