Gulf markets mostly rise after Fed decision — Asharq Al-Awsat
Stock markets in most Gulf countries closed higher on September 17, although investors assessed geopolitical tensions and the consequences of the US Federal Reserve's interest rate hike. Asharq Al-Awsat reports.
On September 16, the Fed raised its rate by 25 basis points, marking the first such decision in more than three years. Following this, most central banks of the member states of the Gulf Cooperation Council also raised their key rates by 25 basis points.
Central bank decisions
The Saudi Central Bank raised its repo and reverse repo rates to 4.50% and 4.00%, respectively. The Central Bank of the UAE increased its base rate under the overnight deposit facility to 3.90%, while the Central Bank of Oman raised its repo rate to 4.50%. The Qatar Central Bank also raised its key rates by 25 basis points.
Most currencies in the region are pegged to the US dollar, so their monetary policy usually follows the Fed's decisions. The exception is the Kuwaiti dinar, which is pegged to a currency basket dominated by the dollar.
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Trading results
Saudi Arabia's main index, after an early rise, ended the session unchanged at 10,778 points. Shares in Saudi National Bank lost 1.3%, while Saudi Aramco shares fell 0.5%.
Abu Dhabi's index rose 0.5% to 10,161 points, Dubai's gained 0.3% to 5,987 points, and Qatar's increased 0.2% to 9,659 points. In Dubai, the rise was supported by Emaar Properties shares, which added 0.5%.
Oman's market climbed 0.7% to 7,603 points. At the same time, the Bahrain and Kuwait indices declined by 0.3% and 0.4%, respectively. Outside the region, Egypt's blue-chip index rose 1.2%, with Commercial International Bank shares gaining 0.6%.
Investor sentiment was also affected by reduced shipping through the Strait of Hormuz. Milad Azar, an analyst at XTB MENA, said strong domestic economic indicators could support markets despite geopolitical pressure.
