Gulf Stock Markets Waver as U.S. Fed’s Cautious Stance Sparks Investor Concerns

This development significantly influenced the Gulf Cooperation Council's (GCC) monetary policy, as most of the regional currencies are pegged to the U.S. dollar.

In early Wednesday trading, major Gulf stock markets experienced declines, mirroring the downward trend in Asian shares, as investors tempered their earlier optimism regarding the potential end to U.S. interest rate hikes.

The minutes from the October 31 to November 1 gathering of U.S. Federal Reserve officials were released on Tuesday, revealing that they had reached a consensus to proceed “carefully” and to only consider raising interest rates if progress in controlling inflation faltered.

This development significantly influenced the Gulf Cooperation Council’s (GCC) monetary policy, as most of the regional currencies are pegged to the U.S. dollar.

Saudi Arabia’s benchmark index, represented by (.TASI), saw a slight dip of 0.1%, with the country’s largest lender, Saudi National Bank (1180.SE), experiencing a 1.2% decrease.

Additionally, on Tuesday, Saudi Arabian state-owned media behemoth, MBC Group, received approval from the Kingdom’s Capital Market Authority (CMA) for its planned initial public offering (IPO).

Dubai’s primary share index, (.DFMGI), also experienced a minor drop of 0.1%, accompanied by a 1.8% decline in Al Ansari Financial Services (ALANSARI.DU). In Abu Dhabi, the index (.FTFADGI) retreated by 0.3%.

Furthermore, there is hopeful anticipation in the United Arab Emirates (UAE) that the country will soon be removed from the “grey list” of nations subjected to special scrutiny by the international Financial Action Task Force (FATF).

State Minister for Trade, Thani Al Zeyoudi, conveyed this optimism on Tuesday, suggesting that the UAE might exit this list early next year.

The Qatari index, represented by (.QSI), also saw a 0.3% decrease, primarily due to a 0.7% decline in Qatar National Bank (QNBK.QA), the Gulf’s largest lender.

In summary, Gulf stock markets faced early declines in response to the cautious stance taken by the U.S. Federal Reserve regarding interest rate hikes.

This apprehension, coupled with specific regional developments, influenced market performances across the Gulf, with fluctuations observed in key indexes and the stocks of major financial institutions.

The Gulf region remains closely tied to U.S. monetary policy, and investors continue to monitor global economic indicators for potential impacts on their portfolios.