Most stock markets in the Gulf ended lower on Thursday, as regional central banks increased key interest rates following the U.S. Federal Reserve's move to raise rates by a quarter of a percentage point.
Oil and gas exporters in the Gulf tend to follow the Fed's rate move as most regional currencies are pegged to the U.S. dollar; only the Kuwaiti dinar is pegged to a basket of currencies, which includes the dollar.
Saudi Arabia's benchmark index (.TASI) fell 0.5%, weighed by a 2.3% fall in Dr Sulaiman Al-Habib Medical Services (4013.SE) and a 0.9% decrease in Al Rajhi Bank (1120.SE).
Dubai's main share index (.DFMGI) dropped 0.3%, with Emirates Central Cooling Systems (EMPOWER.DU) losing 2.1%.
However, the losses were limited by a 1.8% rise in top lender Emirates NBD (ENBD.DU) after it reported a 78% surge in second-quarter profit.
The Dubai bourse recorded some volatility after the Fed's rate hike. The main index could see some price corrections if traders move to secure their gains due to the uncertainty regarding monetary policy, said Daniel Takieddine, CEO MENA at BDSwiss.
"However, the market could remain on a strong footing thanks to strong fundamentals."
In Abu Dhabi, the index (.FTFADGI) eased 0.1%.
The Saudi central bank, known as SAMA, increased its repo rate to 6% and its reverse repo rate to 5.5%, both by 25 basis points, and the UAE said it would raise the base rate on its Overnight Deposit Facility to 5.40% from 5.15%, effective Thursday.
The Qatari index (.QSI), however, bucked the trend to close 1.2% higher, driven by a 4% jump in petrochemical maker Industries Qatar (IQCD.QA).
Outside the Gulf, Egypt's blue-chip index (.EGX30) dropped 0.3%, as most of the stocks on the index were in negative territory including Eastern Co (EAST.CA), which was down 2.2%.
The Egyptian stock market remained under pressure, recording declining trading volumes while foreign investors continued to sell, said Takieddine.
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