Thursday 23 February 2023

Major Gulf bourses drop on Fed's hawkish tone | Reuters

Major Gulf bourses drop on Fed's hawkish tone | Reuters


Major Gulf bourses closed lower on Thursday as investors remained cautious after the U.S. Federal Reserve's minutes from latest meeting reinforced a hawkish tone, although the Egyptian index bucked the trend.

Minutes from the latest Fed meeting on Wednesday showed that a majority of the policymakers agreed that the risks of high inflation warranted further rate hikes.

Most Gulf currencies are pegged to the U.S. dollar, while Saudi Arabia, the United Arab Emirates and Qatar usually mirror U.S. monetary policy changes.

The benchmark index (.TASI) in Saudi Arabia dropped 1.1%, dragged down by losses in most sectors.

The world's largest Islamic bank by assets, Al Rajhi Bank (1120.SE), declined 2.6% and oil giant Aramco (2222.SE) slid 1.9% after J.P. Morgan cut its share target price to 39 riyals from 40 riyals.

Shares of Saudi Kayan Petrochemical (2350.SE) declined 1.9% after it reported full-year net loss of 1.24 bln riyals ($330.54 mln) compared with profit of 2.39 bln riyals a year ago.

Qatari Stock index (.QSI) dropped 1.8%, extending its losses to a third session. With steepest intraday decline since Jan. 17, the index witnessed losses in almost all sectors, led by financial and energy stocks.

The gulf region's largest lender Qatar National Bank (QNBK.QA) declined 2.1% and Qatar Islamic Bank (QISB.QA) plunged 9.6%, the sharpest intraday slide since March 2020 as the stock traded ex-dividend.

In Abu Dhabi, the index (.FTFADGI) fell 0.4%, extending its losses to a fourth session. The index was pulled down by a 1.1% drop in real estate developer Aldar Properties (ALDAR.AD) and a 2.3% slide in Abu Dhabi Islamic Bank (ADIB.AD).

Dubai's benchmark index (.DFMGI) dropped 0.4%, dragged down by losses in almost all sectors, with Emaar Properties (EMAR.DU) declining 1.8% and Dubai's largest lender Emirates NBD (ENBD.DU) falling 1.8%.

Outside the Gulf, Egypt's blue-chip index (.EGX30) rose 1.4%, snapping its previous session losses.

The index was lifted by gains in most sectors, with Commercial International Bank (COMI.CA) rising 2.9% and Egypt Kuwait Holding (EKHO.CA) gaining 1.9%.

The Egypt-based investment holding company reported a rise in fourth-quarter net profit.

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