Most stock markets in the Gulf ended higher on Thursday despite the U.S. Federal Reserve stiffening its hawkish monetary policy stance, although the Saudi index extended losses from the previous session.
The Fed held interest rates steady on Wednesday and projected an increase by year-end, saying monetary policy is likely to be significantly tighter through 2024 than previously thought. The six-member Gulf Cooperation Council's monetary policy is usually guided by the Fed's decision as most regional currencies are pegged to the U.S. dollar.
Dubai's main share index advanced 1%, buoyed by a 6.4% rise in blue-chip developer Emaar Properties.
In Abu Dhabi, the index added 0.2%. Higher interest rates are typically negative for economic growth, but the United Arab Emirates due to solid demographics, strategic location, diversification and thriving tourism is better positioned to absorb rate hikes than other major economies, said Vijay Valecha, chief investment officer, Century Financial.
The Qatari benchmark gained 0.3%, with petrochemical maker Industries Qatar rising 0.9% and Qatar Navigation closing 3.3% higher. Saudi Arabia's benchmark index declined 1%, dragged down by a 1.5% fall in Al Rajhi Bank and a 0.5% decrease in oil giant Saudi Aramco.
Oil prices - a key catalyst for the Gulf's financial markets - fell after posting the largest decline in a month in the previous session, as the Fed rate hike expectations offset the impact of drawdowns in U.S. crude stockpiles.
Outside the Gulf, Egypt's blue-chip index climbed 1.4%, hitting its highest, as most of its constituents were in the positive territory including Commercial International Bank , which was up 1.4%.
- SAUDI ARABIA dropped 1% to 10,949
- ABU DHABI rose 0.2% to 9,846
- DUBAI gained 1% to 4,180
- QATAR added 0.3% to 10,323
- EGYPT leapt 1.4% to 20,081
- BAHRAIN was up 0.3% to 1,930
- OMAN down 0.4% to 4,677
- KUWAIT lost 0.4% to 7,582
(Reporting by Ateeq Shariff in Bengaluru; Editing by Shilpi Majumdar)