Most stock markets in the Gulf ended higher on Thursday after benign U.S. consumer inflation data overnight reinforced bets that the Federal Reserve would start cutting interest rates next month.
The Fed's policy stance is particularly significant in the Gulf since monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed's decisions. Most regional currencies are pegged to the U.S. dollar.
Traders remain convinced that the Fed will reduce rates on Sept. 18 for the first time in 4-1/2 years, but are split on whether policymakers will opt for a super-sized 50 basis-point reduction. While inflation is slowing, signs it may remain sticky spurred a reduction of bets on a larger cut to 37.5% from about 50% a day earlier.
U.S. retail sales rose more than expected in July, which could help allay financial market fears of a sharp economic slowdown that were fanned by a jump in the unemployment rate.
Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.6%, with ACWA Power Co (2082.SE), opens new tab rising 2.1% and Middle East Pharmaceutical Industries (4016.SE), opens new tab up 2.4%.
The kingdom's annual inflation rate held at 1.5% in July, the same as the previous month, government data showed on Thursday, partly reflecting an increase in housing rents.
Dubai's main share index (.DFMGI), opens new tab added 0.1%, helped by a 1.7% increase in sharia-compliant lender Dubai Islamic Bank (DISB.DU), opens new tab.
In Abu Dhabi, the index (.FTFADGI), opens new tab added 0.1%.
The Qatari benchmark (.QSI), opens new tab finished 0.2% higher, with Qatar Gas Transport Nakilat (QGTS.QA), opens new tab advancing 3.2%.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab was up 0.2%, with Commercial International Bank (COMI.CA), opens new tab closing up 1.2%.
Egypt's unemployment rate fell to 6.5% in the second quarter of 2024 from 6.7% in the first quarter, statistics agency CAPMAS said on Thursday.
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