Most stock markets in the Gulf region saw an upturn on Sunday with the Saudi index leading the way. Saudi Arabia’s benchmark index rose 1.1% following a U.S. inflation reading that hinted at potential interest rate cuts from the Federal Reserve. This increase came after the index hit a more than five-month low on Thursday. The rise was supported by gains in various sectors, particularly IT, utilities, and healthcare stocks. ACWA Power saw a 4.4% increase, while Saudi National Bank, the kingdom’s largest lender, added 1.8%. In contrast, Saudi Aramco witnessed a 1.9% decline, marking its lowest level in over a year.
Similarly, Qatar’s benchmark index also experienced gains for the second consecutive session, rising by 0.7%. The boost was fueled by improvements in the energy, finance, and real estate sectors. Notably, Qatar Fuel Co surged by 7.7%, and Qatar Gas Transport climbed by 4.8%. The positive momentum was largely attributed to the U.S. inflation data released on Friday, indicating an expected cut in interest rates by the Federal Reserve.
Given that most Gulf currencies are pegged to the dollar, any changes in U.S. monetary policy tend to have a significant impact on countries like Saudi Arabia, the United Arab Emirates, and Qatar. The hope for interest rate cuts in the U.S. has prompted optimism among investors in the Gulf region, as reflected in the recent market movements.
In contrast to the Gulf markets, Egypt’s blue-chip index faced challenges as it declined for a fifth consecutive session, ending 0.2% lower. The majority of sectors in Egypt were in the red, with companies like Eastern Company witnessing a 5.8% decline and Talaat Mostafa Group dropping by 2.1%. On a positive note, Juhayna Food saw a 2.5% increase following a 41% rise in first-quarter net profit.
Overall, the response of Gulf stock markets to the U.S. inflation data highlights the interconnectedness of global financial markets. Investors in the region are closely monitoring developments in the U.S. economy and the potential impact on their investments. The recent market movements serve as a reminder of the importance of staying informed and adapting to changing economic conditions.