Mideast Stocks: Most Gulf markets gain as Fed lowers rate

PHOTO

Most Gulf stock markets ended higher on Thursday after the U.S. Federal ‍Reserve's interest rate ‍cut, but gains were capped by the central bank's cautious tone on policy trajectory.

The Fed's latest projections, released after the two-day policy meeting, indicated that the median ⁠official still expects only one 25-basis-point rate cut in 2026, unchanged from the September forecast. Policymakers continue ⁠to balance ‌evidence of a softening labour market with concerns of persistent inflation.

Adding to the uncertainty, the recent prolonged U.S. government shutdown has disrupted data ⁠releases, pushing the critical November jobs report to December 16 and the latest inflation numbers to December 18. Monetary policy shifts in the U.S. have a significant impact on Gulf markets, where most currencies are pegged to the dollar.

Gulf ⁠central banks cut key interest rates by 25 basis points on Wednesday, mirroring the move by the Fed. Dubai's main share index gained ‍0.4%, helped by a 2.6% rise in top lender Emirates NBD.

The market remains backed by solid fundamentals and a strong growth rate, which could be further bolstered by the recent interest rate cut, said Milad Azar, market analyst at XTB MENA.

In Abu Dhabi, the index closed 0.3% higher. The Qatari benchmark advanced 0.9%, with petrochemical maker Industries Qatar rising 1.6%. Saudi Arabia's benchmark index, however, eased 0.1%, hit by a 1.7% fall in major oil producer Saudi Aramco.

Oil prices fell on Thursday as investors shifted focus back to Russia-Ukraine peace talks and monitored potential fallout from a U.S. seizure of a sanctioned ⁠oil tanker off the coast of Venezuela. Crude prices are ‌hovering near multi-month lows, putting pressure on the fiscal balances of oil-dependent Gulf nations through lower revenues.

Outside the Gulf, Egypt's blue-chip index lost 0.1%.