Most stock markets in the Gulf ended lower on Wednesday in thin trade ahead of Eid al-Fitr holidays and weighed by concerns around interest rate hikes, with the Dubai index leading the losses.
The U.S. Federal Reserve is likely to have one more interest rate rise in store, Atlanta Fed President Raphael Bostic said on Tuesday, as the central bank continues to battle inflation.
Most Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the U.S. dollar and follow the Fed's policy moves closely, exposing the region to a direct impact from monetary tightening in the world's largest economy.
Dubai's main share index (.DFMGI) declined 1.2%, dragged down by a 5.2% slide in Dubai Electricity and Water Authority (DEWAA.DU) as the stock traded ex-dividend.
In Abu Dhabi, the index (.FTFADGI) ended flat.
Many investors prefer to cash in holdings ahead of the Eid holiday, which lasts for at least three days in most Gulf countries.
The Qatari index (.QSI) fell 0.1%, declining for a sixth consecutive session, with Qatar Islamic Bank (QISB.QA) losing 2.3%.
The Qatari bourse maintained its downtrend with uncertainties around the developments in natural gas markets affecting confidence, said Ahmed Negm, head of market research MENA at XS.com.
"Investors were also concerned about the global economic developments and the resilient inflation levels in Europe. Tighter monetary policies could affect demand for energy products and the local economy."
Outside the Gulf, Egypt's blue chip index (.EGX30) finished 0.1% lower, as profit-taking continues.
According to Negm, international investors continue to drive selling pressures with these investors in particular taking a more cautious approach following global developments and local risks.
** Saudi was close for Eid
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