By Ateeq Shariff
(Reuters) – Most stock markets in the Gulf ended lower on Monday, with the Saudi index hitting a 20-month low ahead of interest rate decisions from the U.S. Federal Reserve and other major central banks, while soft oil prices added to concerns.
The Fed is widely expected to raise rates by 50 basis points at its last meeting of 2022 on Wednesday. Investors will also focus on the central bank’s updated economic projections and Fed Chair Jerome Powell’s press conference.
Most Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the U.S. dollar and follow the Fed’s policy moves closely, exposing the region to a direct impact from monetary tightening in the world’s largest economy.
Saudi Arabia’s benchmark index dropped 1%, hitting its lowest since April last year, with Retal Urban Development Co shedding 3.5%.
Elsewhere, oil giant Saudi Aramco retreated 1.9%.
Dubai’s main share index lost 0.2%, hit by a 1.3% fall in sharia-compliant lender Dubai Islamic Bank.
In Abu Dhabi, the index finished 0.9% lower, falling a fifth session.
Crude oil prices – a key catalyst for the Gulf’s financial markets – dipped, deepening a multi-week decline, as a weakening global economy offset supply challenges stemming from the closure of a key pipeline supplying the United States and Russian threats of a production cut.
Last week, Brent fell to its lowest since December 2021 amid concerns a possible global recession will hit oil demand.
The Qatari benchmark was down 0.7%.
Outside the Gulf, Egypt’s blue-chip index gained 0.9%, bolstered by a 1.8% rise in top lender Commercial International Bank.
SAUDI ARABIA fell 1% to 10,033
ABU DHABI lost 0.9% to 10,155
DUBAI eased 0.2% to 3,317
QATAR dropped 0.7% to 11,368
EGYPT rose 0.9% to 14,724
BAHRAIN was down 0.1% to 1,853
OMAN gained 1.4% to 4,877
KUWAIT retreated 0.7% to 8,253
(Reporting by Ateeq Shariff in Bengaluru; Editing by Mark Potter)
