Most Gulf stock markets closed higher on Sunday, buoyed by growing expectations of an imminent interest rate cut by the US Federal Reserve (Fed).
These hopes, coupled with stable oil prices, have boosted positive investor sentiment in the region.
Federal Reserve expectations support liquidity
The movement of Gulf markets reflects the close link to US monetary policy,
as the currencies of most Gulf countries are pegged to the dollar.
Lower US interest rates usually mean lower borrowing costs,
which eases the financing burden on companies and governments in the region.
Increased attractiveness makes regional assets more appealing to investors seeking better returns.
CME Group’s FedWatch tool currently indicates that traders are placing
a high probability (around 89%) of an interest rate cut at the Fed meeting next week.
Details of market performance
Dubai: The market index rose by 0.4%, with banking and real estate stocks leading the gains.
Among them was Emirates NBD Bank, whose stock jumped by 3.6%.
Abu Dhabi: The general index recorded an advance of 0.4%.
Kuwait and Oman: The markets recorded slight increases of 0.6% and 0.4% respectively.
The Qatari and Bahraini markets also declined slightly,
with the Qatari index falling by 0.1% and the Bahraini index by 0.2%.
Local market
This indicates that local market factors still play a role in some countries.
Saudi Arabia: The main market index (Tadawul) rose by 0.5%.
The support came from strong gains in stocks such as Saudi National Bank
and telecommunications companies.
In addition, shares of oil giant Aramco rose by 0.3%.
Crude oil prices
The Kingdom’s non-oil private sector also witnessed
its fastest expansion in 10 months, driven by strong demand.
Impact of oil prices: In addition to hopes for interest rate cuts, crude oil prices stabilized.
This provided additional support to Gulf markets,
which are heavily reliant on energy revenues.
