Stock markets in the Gulf ended mixed on Monday as investors await a likely cut to US interest rates this week, with the Saudi index giving up early gains to conclude in negative territory.
The US Federal Reserve is all but certain to cut rates on Wednesday, but the debate is over the size of the cut, with market bets inclining towards 50 basis points (bps), LSEG data showed.
Monetary policy in the Gulf Cooperation Council (GCC), which includes the UAE, often aligns with the US Federal Reserve’s decisions as most of the regional currencies are pegged to the US dollar.
Dubai’s main share index gained 0.3%, with Dubai Taxi Company advanced 7.5%, extending gains from the previous session.
The taxi operator on Friday announced the company had been awarded 300 new plates, expanding its fleet, at the latest auction held by Dubai’s Roads and Transport Authority.
In Abu Dhabi, the index closed 0.4% higher.
Saudi Arabia’s benchmark index dropped 0.3%, hit by a 1.7% fall in Alinma Bank and a 0.2% decrease in Al Rajhi Bank. However, oil behemoth Saudi Aramco was up 0.2%.
Oil prices – a catalyst for the Gulf’s financial markets – edged higher as ongoing disruption to US Gulf oil infrastructure balanced persistent demand concerns after a fresh round of Chinese data while investors await Fed rate decision.
The Qatari benchmark eased 0.1%, with Qatar Islamic Bank losing 0.3%.
The Qatari stock market saw limited movements, as investors in the region await this week’s central banks meetings, particularly the Federal Reserve’s, said Ahmed Negm Head of Market Research MENA at XS.com.
“The market is close to its high from earlier this year, benefiting from a rebound.”
Outside the Gulf, Egypt’s blue-chip index declined 0.8%, weighed down by a 1% fall in Commercial International Bank.
