Gulf markets retreat as recession worries weigh | Reuters
Stock markets in the Gulf ended lower on Thursday as mounting evidence of a U.S. economic slowdown fuelled worries about a possible global recession.
The U.S. services sector slowed more than expected in March as demand cooled, while a measure of prices paid by services businesses fell to the lowest in nearly three years.
Fed fund futures are indicating a 62.5% chance of the U.S. central bank pausing its rate hikes in May and a 51.3% chance of a rate cut at its July meeting, according to CME Group's Fedwatch tool.
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 Arabia's benchmark stock index (.TASI) eased 0.1%, extending losses from the previous session, hit by a 1.3% decline in Retal Urban Development Co (4322.SE).
The Saudi bourse saw more price corrections as traders move to secure gains in the current uncertain atmosphere, said Fadi Reyad, chief market analyst at CAPEX.com.
"Global sentiment affected local stocks after U.S. economic data altered expectations."
However, the index posted its third weekly gain of 3%. Earlier this week, the benchmark registered sharp gains after a surprise announcement by OPEC+ to further cut oil production.
Dubai's main share index (.DFMGI) dropped 0.4%, with blue-chip developer Emaar Properties (EMAR.DU) losing 1.4%.
Shares in UAE-based currency exchange company Al Ansari Financial Services (ALANSARI.DU) climbed 16.5% above its listing price on its market debut.
In Abu Dhabi, the index (.FTFADGI) retreated 0.3%, while the Qatari index (.QSI) fell 0.2%.
Outside the Gulf, Egypt's blue-chip index (.EGX30) tumbled 1.8%, as most of the stocks on the index were in negative territory.
The Egyptian market is coming under increasing pressure as risk aversion increases among investors on a global and local stage, Reyad said.
UAE's Al Ansari shares opens 16% higher in debut trading
UAE's Al Ansari Financial Services shares opened nearly 17% higher on its Dubai Financial Market debut on Thursday following an IPO in which the exchange house raised 773 million dirhams ($210 million).
Shares opened at AED1.20 compared with the IPO price of AED1.03 per share. It is currently trading at AED1.21.
Earlier on Thursday, the company said it has appointed BHM Capital Financial Services as a liquidity provider for its shares on DFM.
Mideast Stocks: Major Gulf markets ease on recession worries
Major stock markets in the Gulf inched lower in early deals on Thursday, as mounting evidence of a U.S. slowdown fuelled worries about a possible global recession.
The U.S. services sector slowed more than expected in March as demand cooled, while a measure of prices paid by services businesses fell to the lowest in nearly three years, giving the Federal Reserve a boost in the fight against inflation.
As signs have built this week for a sharp U.S. slowdown, traders have been pricing for a more dovish Fed. Money markets now see the odds of a further quarter-point hike at the May meeting versus a pause as a coin toss. And 71 basis points of easing are priced by year-end.
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 Arabia's benchmark stock index eased 0.1%, dragged by a 0.8% fall in Saudi National Bank, the country's biggest lender.
Oil Prices - a key catalyst for the Gulf's financial markets - fell as weak U.S. economic data stoked recession fears.
Dubai's main share index was down 0.1%.
Shares in UAE-based currency exchange company Al Ansari Financial Services climbed 16.5% above the listing price on their market debut after raising $210.5 million in an initial public offering for 10% of the business.
In Abu Dhabi, the index dropped 0.2%, with top lender First Abu Dhabi Bank down 0.6%.
MSCI's broadest index of Asia-Pacific shares was down 0.9%, accelerating declines as the trading day unfolded.
The Qatari index lost 0.1%, weighed down by a 0.6% decline in petrochemical maker Industries Qatar.
