Most stock markets in the Gulf ended lower on Wednesday as traders bet that the U.S. Federal Reserve would be cautious in cutting interest rates after data showed the country's economy was stable.
Data on Tuesday showed U.S. job openings unexpectedly increased in November while hiring softened, suggesting the labour market slowed at a pace that probably does not require the Fed to be in a rush to cut rates.
Fed decisions have a significant impact on the Gulf region's monetary policy as most of its currencies are pegged to the dollar.
The Fed in December projected just two rate cuts for 2025, lower than the four it had earlier predicted. Markets are currently pricing in even less than that at 38 basis points, with the first cut fully priced in for July.
Investor focus in 2025 will likely be on shifting U.S. rate expectations, the growing divergence in policy path between U.S. and other economies, and the threat of tariffs once President-elect Donald Trump steps into the White House on Jan. 20.
Saudi Arabia's benchmark index (.TASI), opens new tab fell 0.2%, hit by a 1.1% fall in Al Rajhi Bank (1120.SE), opens new tab and a 1.6% decrease in Saudi Telecom Company (7010.SE), opens new tab.
However, Nice One Beauty Digital Marketing (4193.SE), opens new tab surged 30% on its debut trade to 45.5 riyals per share from an offer price of 35 riyals.
Dubai's main share index (.DFMGI), opens new tab lost 0.1%, ending two sessions of gains, with toll operator Salik Company (SALIK.DU), opens new tab.
In Abu Dhabi, the index (.FTFADGI), opens new tab added 0.3%, led by a 2.8% jump in the country's biggest lender First Abu Dhabi Bank (FAB.AD), opens new tab.
Abu Dhabi bourse finished in positive territory, driven by strong performance in the financial sector, particularly banking stocks. Recovering oil prices provided some support, said George Pavel, general manager at Naga.com.
Qatari index (.QSI), opens new tab closed flat.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab dropped 0.5%.
According to Pavel, Egypt's market declined amid persistent uncertainty, with economic indicators showing continued business activity contraction and increasing price pressures, creating a challenging environment for market sentiment.
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