Abu Dhabi Hits 2-Year Low as Gulf Bourses Drop
Most stock markets in the Gulf slipped on Tuesday amid rising geopolitical tensions in the region, with investors also awaiting key U.S. inflation data later in the week.
Israeli tanks advanced to the center of Rafah for the first time on Tuesday as part of a ground offensive in the southern Gaza city, which has stirred global condemnation due to its continued civilian toll.
Market Performance
Saudi Arabia’s benchmark stock index dropped for the fourth consecutive day, falling 1.5% to 11,660, marking its lowest level in five months. ACWA Power saw a significant decline of 4.7%, while Saudi National Bank, the kingdom’s largest lender, decreased by 2.1%.
The Abu Dhabi benchmark index fell 1% to 8,742, its lowest level in over two years. The conglomerate Alpha Dhabi Holding declined by 6% to close at 11.0 dirhams per share, its lowest since listing in June 2021. First Abu Dhabi Bank, the UAE’s largest lender, dropped 2.2% to 11.58 dirhams per share, the lowest in three and a half years.
Dubai’s benchmark index retreated by 1% after the previous day’s gains, with most sectors in the red. Toll operator Salik Company slid 2.2%, and Emirates NBD, the emirate’s largest lender, fell by 1.6%.
Qatar Index Rebounds
Contrary to the trend, the Qatari benchmark index rebounded after four consecutive sessions of losses, ending 0.5% higher. The gains were driven by improvements in the finance, industry, materials, and utilities sectors. Qatar Islamic Bank, the country’s largest Islamic lender, climbed by 3.2%, while Qatar Navigation rose by 1.1%.
Analyst Insights
“GCC markets were mostly under pressure due to geopolitical tensions and uncertainty around oil prices, with the upcoming U.S. inflation data also impacting market sentiment,” said Hani Abuagla, Senior Market Analyst at XTB MENA.
U.S. Inflation Data Awaited
Investors are keenly watching the Federal Reserve’s preferred measure of inflation, the core personal consumption expenditures, due on Friday. This data is expected to provide clues on the U.S. central bank’s interest rate outlook. Markets are currently fully pricing in one 25 basis-point rate cut by the Fed this year.
Given that most Gulf currencies are pegged to the dollar, any U.S. monetary policy changes are usually followed by Saudi Arabia, the United Arab Emirates, and Qatar.
Egypt Market Update
Outside the Gulf, Egypt’s blue-chip index eased by 0.3%, pressured by a 1.9% drop in Talaat Mostafa Group and a 15.4% slump in Qalaa Holding. However, Palm Hills Development climbed by 3.6%, posting a 300% surge in its first-quarter net profit.
