Mideast Stocks: Gulf markets end mixed as investors assess Fed, geopolitical tensions

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Stock markets in the Gulf ended mixed on Thursday as investors assessed the latest Federal Reserve commentary and ongoing geopolitical tensions.

Saudi Arabia's benchmark index gained 0.3%, with ACWA Power rising 3.6%, while the Saudi Arabian Mining Company advanced 3% after the bourse launched single options contracts on the stock. The Saudi stock market stabilized after two sessions of losses.

The banking sector and others saw mixed performances, said Daniel Takieddine CEO MENA at BDSwiss. "While sliding oil prices could create some risks, the Saudi market could find support from solid corporate and economic fundamentals," he said.

Oil prices - a catalyst for the Gulf's financial markets - fell to a three-week low, extending losses on hopes of easing tensions in the key producing region of the Middle East, while investors turned their focus to a bleaker demand picture.

Dubai's main share index rebounded 0.8%, ending four sessions of losses, led by a 1.7% gain in toll operator Salik Co. In Abu Dhabi, the index finished 0.2% higher.

The Qatari benchmark fell 0.2%, hit by a 1.1% fall in the Gulf's biggest lender Qatar National Bank. Top U.S. central bank officials including Federal Reserve Chair Jerome Powell backed away on Tuesday from providing any guidance on when interest rates may be cut, saying instead that monetary policy needs to be restrictive for longer and further, dashing investor hopes for meaningful reductions in borrowing costs this year.

Most Gulf currencies are pegged to the dollar and any monetary policy change in the United States is usually mimicked by Saudi Arabia, the United Arab Emirates and Qatar.

Outside the Gulf, Egypt's blue-chip index declined 4.5%, as almost all its constituents were in negative territory including top lender Commercial International Bank, which was down 2.6%. Egypt's foreign debt climbed by $3.5 billion in the fourth quarter of 2023 to $168.0 billion, data on the planning ministry website showed.

Finance Minister Mohamed Maait projected on Tuesday that GDP would grow 2.8% in the fiscal year to end-June and by 4.2% next year. The IMF has forecast GPD growth of 3.0% in calendar 2024.