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Most Gulf markets in red on US rate cut concerns, geopolitical tensions

Published 04/16/2024, 04:20 AM
Updated 04/16/2024, 09:36 AM
© Reuters. FILE PHOTO: An investor walks through the Dubai Financial Market after Joe Biden won the U.S. presidency, in Dubai, United Arab Emirates November 8, 2020. REUTERS/Christopher Pike/File Photo

By Ateeq Shariff

(Reuters) - Most stock markets in the Gulf ended lower on Tuesday after stronger-than-expected U.S. retail sales reinforced the view the Federal Reserve may not rush to cut interest rates this year.

Data last week had already shown U.S. consumer prices increased more than expected in March as Americans paid more for gasoline and rental housing, leading financial markets to anticipate the Fed would delay cutting rates until September.

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 dropped 1.6%, with most of its constituents in negative territory, including Al Rajhi Bank, which was down 2.9%.

Among other losers, oil giant Saudi Aramco (TADAWUL:2222) retreated 1.3%.

Investors remained cautious about Israel's response to a weekend drone and missile attack by Iran as international pressure for restraint grew amid fears of an escalation of conflict in the Middle East.

Dubai's main share index lost 1.4%, dragged down by a 1.7% drop in top lender Emaar Properties.

The Dubai bourse breached the support level it had held for the past month, affected by both geopolitical tensions and heightened inflationary pressures in the United States. The market may continue its downward trajectory if these pressures persist, said Joseph Dahrieh, managing principal at Tickmill.

"However, the upcoming IPO of Spinneys could positively influence the overall market sentiment," he added.

Supermarket chain franchisee Spinneys announced plans for an initial public offering (IPO) on the Dubai bourse and said on Tuesday it planned to expand into Saudi Arabia this year.

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In Abu Dhabi, the index eased 0.6%.

The Qatari benchmark lost 0.7%, hit by a 1.2% fall in petrochemical maker Industries Qatar.

Oil prices, a catalyst for the Gulf's financial markets, dipped but remained near $90 a barrel as investors weighed up how supply from the Middle East might be affected should the geopolitical situation deteriorate further.

Outside the Gulf, Egypt's blue-chip index fell 0.7%, with Talaat Mostafa Holding losing 2.6%.

SAUDI ARABIA fell 1.6% to 12,500

ABU DHABI down 0.6% to 9,194

DUBAI dropped 1.4% to 4,184

QATAR declined 0.7% to 9,853

EGYPT lost 0.7% to 29,401

BAHRAIN added 0.1% to 2,042

OMAN rose 0.2% to 4,738

KUWAIT retreated 2.8% to 7,569

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