Gulf stock markets remained subdued on Tuesday, reflecting concerns over weak oil demand, despite rising expectations of a potential US interest rate cut next month offering some support.
Oil prices, which are a key driver for Gulf financial markets, dipped due to easing concerns over a potential supply disruption in the Middle East and growing worries about China’s economic slowdown impacting global demand.
In Qatar, the stock index fell by 0.1%, with Qatar International Islamic Bank declining by 1.2%. Dubai’s main share index also slipped 0.1%, as Parkin Co, which manages public parking in the Emirates, dropped 1.4%.
Abu Dhabi’s index remained flat, while Saudi Arabia’s benchmark index edged up by 0.1% in volatile trading, buoyed by a 1% gain in Al Rajhi Bank. However, shares of oil giant Saudi Aramco fell by 0.7%.
Optimism surrounding potential US rate cuts has provided some relief, as a majority of economists polled by Reuters now anticipate the Federal Reserve will lower interest rates by 25 basis points at each of its remaining three meetings in 2024—one more cut than previously expected. This comes as Fed officials have recently hinted at possible rate easing in September.
Monetary policy in the six-member Gulf Cooperation Council (GCC) typically follows the Fed’s lead, as most regional currencies are pegged to the US dollar.
