Wednesday 11 January 2023

Gulf stocks skid ahead of U.S. inflation data; Egypt up | Reuters

Gulf stocks skid ahead of U.S. inflation data; Egypt up | Reuters


Gulf stock markets fell on Wednesday, with banking shares taking the biggest hit across the markets, as investors eagerly await Thursday's U.S. inflation data that is likely to shape the size of the Fed's next interest rate hike.

Farah Mourad, senior market analyst of XTB MENA, said GCC stock markets were seeing some uncertainty as global growth expectations came under pressure with volatile energy prices.

Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by Fed policy decisions because most regional currencies are pegged to the U.S. dollar, exposing them to direct impacts from any Fed monetary tightening.

Saudi Arabia's benchmark index (.TASI) eased 0.2%, pressured by financial stocks, with lenders Saudi National Bank (1180.SE) and Banque Saudi Fransi falling 1.2% and 2.1%, respectively.

Abu Dhabi's share index (.FTFADGI) declined 0.7%, dragged down by a 2.2% fall in UAE's largest lender First Abu Dhabi Bank (FAB.AD).

Dubai's main share index (.DFMGI) lost 0.5%, led by a decline in its financial stocks as lenders Dubai Islamic Bank (DISB.DU) and Emirates NBD Bank (ENBD.DU) tumbled 2.5% and 1.5%, respectively.

The benchmark Qatari index (.QSI) slipped 1.3%, as Qatar National Bank (QNBK.QA), the Gulf's biggest bank by assets, declined more than 3%.

QNB reported after market close on Wednesday a 9% rise in annual net profit after adjusting for hyperinflation related to its business in Turkey.

Outside the Gulf, Egypt's blue-chip index (.EGX30), closed 0.4% higher, after a sharp decline in the previous session.

Mourad attributed the rebound in reaction to yesterday's strong decline as traders saw an opportunity to buy.

"Main index remains exposed to new losses as trading volumes decrease, with pound remained under pressure"

Egypt's pound weakened by more than 13% to a new low below 32 to the U.S. dollar on Wednesday as the central bank moved to a more flexible exchange rate under the terms of an IMF financial support package.


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