Most Gulf markets retreat ahead of Fed rate cut decision
By Ateeq Shariff
Sept 17 (Reuters) -Most stock markets in the Gulf ended lower on Tuesday, ahead of the U.S. interest rate decision that traders are betting may start with an outsized cut.
Investors remain solely focused on the Federal Reserve's two-day policy meeting that concludes on Wednesday, as chances have crept up in the past week in favour of a 50-basis-point rate cut.
Markets are now pricing in a 65% chance of a 50-basis-point cut versus 34% a week ago after media reports revived the prospect of more aggressive easing.
Monetary policy in the Gulf Cooperation Council (GCC), which includes the UAE, often aligns with the U.S. Fed's decisions as most of the regional currencies are pegged to the U.S. dollar.
The Qatari benchmark .QSI dropped 0.4%, while Qatar Islamic Bank QISB.QA and sharia-compliant lender Masraf Al Rayan MARK.QA declined 1% each.
Investors exercised caution, engaging in profit-taking ahead of the Fed's rate decision, said Milad Azar, market analyst at XTB MENA.
Dubai's main share index .DFMGI finished flat.
Saudi Arabia's benchmark index .TASI gained 0.2%, helped by a 3.1% rise in aluminium products manufacturer Al Taiseer Group 4143.SE.
According to analyst Azar, the potential rate cut by the Fed is expected to positively impact market sentiment, as it may prompt the Saudi central bank to adopt similar measures to enhance business conditions.
"Additionally, oil prices continue to play a definitive role in market performance."
Among other gainers, Saudi Arabian Mining Company (Ma'aden) 1211.SE jumped 6.6%, a day after it signed a non-binding agreement with Aluminium Bahrain (Alba) ALBH.BH to pursue a potential business combination that would create a global powerhouse.
On Sunday, U.S.-based aluminium maker Alcoa said it would sell a 25.1% stake in its joint venture with Ma'aden to the company for about $1.1 billion in cash and stock.
In Bahrain, the index .BAX advanced 3.8%, buoyed by a 20% surge in Alba.
Outside the Gulf, Egypt's blue-chip index .EGX30 fell 0.3%, with Commercial International Bank COMI.CA losing 0.5%.
SAUDI ARABIA | .TASI gained 0.2% to 11,886 |
ABU DHABI | .FTFADGI rose 0.4% to 9,428 |
DUBAI | .DFMGI was flat at 4,395 |
QATAR | .QSI dropped 0.4% to 10,405 |
EGYPT | .EGX30 lost 0.3% to 30,159 |
BAHRAIN | .BAX advanced 3.8% to 2,108 |
OMAN | .MSX30 down 0.4% to 4,713 |
KUWAIT | .BKP eased 0.2% to 7,743 |
Reporting by Ateeq Shariff in Bengaluru; Editing by Shailesh Kuber
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
