Gulf bourses end mixed on Fed’s hawkishness, volatile oil

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Stock markets in the Gulf region

closed mixed on Thursday as a hawkish stance from the U.S.

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Federal Reserve raised recession fears, while energy markets

remained volatile.

The Fed’s hawkish stance risks tipping the U.S. economy into

a recession, but Fed Chair Jerome Powell said a higher cost

would be paid if the central bank did not get a firmer grip on

inflation.

Most Gulf states, including Saudi Arabia and the United Arab

Emirates, raised key interest rates by half a percentage point

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on Wednesday, following the Federal Reserve’s decision to

increase rates by that amount.

Monetary policy in the six-member Gulf Cooperation Council

(GCC) is usually guided by Fed policy decisions because most

regional currencies are pegged to the U.S. dollar.

Saudi Arabia’s benchmark index gained 0.4%, rising

for a second session, led by a 5.5% jump in Retal Urban

Development Co after the developer signed agreements

with Roshn Real Estate to develop villas.

The Saudi index, which touched a 20-month low earlier this

week, posted a weekly gain of 0.4%, its first in eight weeks.

Oil prices, a key catalyst for the Gulf’s financial markets,

steadied after early declines as the dollar firmed, while the

possibility of rate hikes stoked demand concerns.

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In Abu Dhabi, the index advanced 1.1%, extending

gains from the previous session when it snapped a seven-day

losing streak.

The Abu Dhabi bourse extended its rebound as the Fed’s rate

hike matched expectations and oil prices have maintained a

stronger profile for the last few days, Abdelhadi Laabi, Chief

Marketing Officer at Emporium Capital, said.

The Qatari index declined 0.9%, falling for a fourth

session, hit by a 1.6% drop in Qatar Islamic Bank.

According to Laabi, apart from volatility in natural gas

prices, traders were also concerned about rising interest rates

and high inflation locally.

Outside the Gulf, Egypt’s blue-chip index slid

1.5%, easing from over four-year highs.

The Egyptian index, however, posted its ninth weekly gain of

2%.

SAUDI ARABIA rose 0.4% to 10,290

ABU DHABI up 1.1% to 10,168

DUBAI added 0.1% to 3,315

QATAR dropped 0.9% to 10,977

EGYPT lost 1.5% to 15,142

BAHRAIN closed flat at 1,854

OMAN eased 0.2% to 4,856

KUWAIT fell 0.6% to 8,177

(Reporting by Ateeq Shariff in Bengaluru

Editing by Mark Potter)