Most Gulf bourses in red after Fed rate hike | Reuters

Most Gulf bourses in red after Fed rate hike | Reuters

Most major stock markets in the Gulf were subdued in early trade on Thursday, tracking global shares lower on the U.S. Federal Reserve rate hike and signs of stress at another regional bank in the world's largest economy.

The Fed raised interest rates by a quarter of a percentage point and signalled it may pause further increases, giving officials time to assess the fallout from the recent bank failures, the political standoff over the U.S. debt ceiling, and monitor inflation.

At a press conference, Fed Chair Jerome Powell said inflation remains the chief concern, and that it is therefore too soon to say with certainty that the rate-hike cycle is over.

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.

Saudi benchmark index (.TASI) dropped 0.3%, with petrochemical maker Saudi Basic Industries Corp (2010.SE) falling as much as 1.9% after reporting a sharp decline in first-quarter net profit.

Among other losers, Saudi British Bank (1060.SE) retreated more than 3% as the lender traded ex-dividend.

Separately, government-led reforms and the growth of private investment in new sectors will help support non-oil economic growth in Saudi Arabia amid an expected sharp slowdown in overall growth this year, a senior IMF official said.

Dubai's main share index (.DFMGI) fell 0.1%, with blue-chip developer Emaar Properties (EMAR.DU) losing 0.7%.

In Abu Dhabi, the index (.FTFADGI) eased 0.1%.

Oil prices - a key catalyst for the Gulf's financial markets - rose but were unable to claw back the over 9% decline during the previous three days as demand concerns in major consumers overrode signals that the U.S. may pause its interest rate increases.

The Qatari benchmark (.QSI), however, bucked the trend to trade 1% higher, buoyed by a 4.4% jump in telecoms firm Ooredoo (ORDS.QA) after it reported a rise in first-quarter net profit.