Stocks in the Middle East broadly rose on Wednesday, extending their comeback from an aggressive sell-off in global stocks earlier in the week driven in part by fears of a possible U.S. recession.
Stock markets in Saudia Arabia, Dubai and Abu Dhabi all ended the day higher as shares in Europe and Asia also rose. Share price gains in Asia were led by a bounce in the Nikkei, as the Bank of Japan unexpectedly turned cautious on rate hikes amidst market volatility.
Some investors also reassessed the outlook for the U.S. economy after Federal Reserve policymakers pushed back late on Monday against the notion that weaker-than-expected July jobs data means that the economy is in a recessionary freefall.
Markets are pricing in a 65% chance of the Fed cutting interest rates by 50 basis points in September, the CME FedWatch tool shows, compared with 85% a day ago.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed's decisions as most regional currencies are pegged to the U.S. dollar.
Saudi Arabia's benchmark index (.TASI), opens new tab closed 0.4% higher, with oil giant Saudi Aramco (2222.SE), opens new tab rising 2%.
Aramco will buy from Japan's Sumitomo Chemical (4005.T), opens new tab a 22.5% stake in their petrochemical joint venture Petro Rabigh (2380.SE), opens new tab for $702 million, the companies said on Wednesday, outlining a turnaround strategy for the loss-making venture.
Petro Rabigh shares soared 10%.
Dubai's main share index (.DFMGI), opens new tab advanced 1.5%, led by a 2.9% rise in blue-chip developer Emaar Properties (EMAR.DU), opens new tab.
Meanwhile, Dubai's main airport is on track to handle a record number of passengers this year after an 8% year-on-year increase in the first six months, operator Dubai Airports said on Wednesday.
In Abu Dhabi, the index (.FTFADGI), opens new tab finished 1.1% higher.
The Qatari benchmark (.QSI), opens new tab added 0.3%, with Islamic lender Masraf Al Rayan (MARK.QA), opens new tab increasing 1.3%.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab rose 1.5%, with Talaat Mostafa Group (TMGH.CA), opens new tab gaining 4%.
Egypt's remittances from its overseas workers reached $7.5 billion in the April-June quarter, up from $4.6 billion a year earlier, the Central Bank of Egypt said on Wednesday.
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