Gulf Stock Exchange:Most stock markets in the Gulf region extended gains on Sunday, boosted by positive U.S. economic data that strengthened expectations of an imminent interest rate cut by the Federal Reserve next month.
Recent US data showed a moderation in inflation and solid retail spending, helping to shift market sentiment away from recession fears that had been triggered by a weak US jobs report in early August. The data has instilled confidence that the US economy can continue to grow, easing fears of a recession.
As central bankers from around the world prepare to meet in Jackson Hole, Wyoming, this week, traders increasingly expect the Fed to cut borrowing costs from a 23-year high. The CME FedWatch tool indicated that the probability of an emergency 50-basis-point rate cut has declined to 25%, from 55% a week ago.
Since the monetary policy of the six members of the Gulf Cooperation Council (GCC) is largely influenced by the decisions of the Federal Reserve (due to the peg of most regional currencies to the US dollar), this potential rate cut has significant implications for the region.
In Saudi Arabia, the benchmark index rose 0.6 percent, boosted by a strong 6.2 percent rise in aluminum products maker Al Taiseer Group.
Qatar’s index saw a modest 0.1 percent rise, supported by a 0.9 percent gain in petrochemical giant Industries Qatar.
Outside the Gulf, Egypt’s blue-chip index fell 0.6 percent, hurt by a 1.5 percent drop in Talaat Mostafa Group.
As markets continue to react to developments in global economic indicators, investors in the Gulf region remain focused on upcoming Federal Reserve decisions and their potential impact on the region’s financial outlook.
(With contributions from Reuters.)
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