Most stock markets in the Gulf ended higher on Tuesday ahead of a widely expected pause in interest rate hikes by the U.S. Federal Reserve, while falling crude prices weighed on investor sentiment. 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.
Saudi Arabia's benchmark index gained 0.2%, led by a 3.2% rise in Savola Group. However, oil behemoth Saudi Aramco fell 0.2%. Dubai's main share index advanced 0.7%, rising for an eighth session, with Gulf Navigation jumping more than 8%.
The Dubai stock market saw gains this week but could be exposed to price corrections after its surge since the beginning of the month if traders move to secure their gains, said Ahmed Negm, Head of Market Research MENA at XS.com. "At the same time, improving sentiment among investors could limit the downside potential."
In Qatar, the index retreated 1.7%, snapping three sessions of losses, as most of the stocks on the index were in negative territory including Qatar Islamic Bank, which was down 2.9%. Prices of oil - a key catalyst for the Gulf's financial markets - tumbled more than $1 a barrel, after a strong rally in the previous session, as worries about global economic growth outweighed Saudi Arabia's pledge to deepen output cuts.
The Abu Dhabi index eased 0.2%. Outside the Gulf, Egypt's blue-chip index finished 0.8% higher. According to Negm, the Egyptian bourse could see more gains this week with trading volumes at high levels, driven by local investors. "However, international investors returned to their selling trend, which could weigh on the main index to a certain extent."
- SAUDI ARABIA rose 0.2% to 11,317
- ABU DHABI fell 0.2% to 9,357
- DUBAI gained 0.7% to 3,678
- QATAR dropped 1.7% to 10,255
- EGYPT up 0.8% to 17,491
- BAHRAIN down 0.2% to 1,952
- OMAN was flat at 4,655
- KUWAIT advanced 1% to 7,649
(Reporting by Ateeq Shariff in Bengaluru; Editing by Devika Syamnath)