Most Gulf markets gain but cautious ahead of Fed chair speech
Saudi Arabia's stock market ended higher due to an increase in oil prices, but gains were limited as investors awaited further interest rate insight from the U.S. Federal Reserve.
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Posted 8/20/2023, 1:54:00 PM
reuters.com
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Saudi Arabia's Tadawul All Share Index closed slightly higher, with a total trading turnover of SR5.02 billion, while a mix of stock performances saw some stocks advance and others decline.
Most stock markets in the Gulf ended lower due to a slightly hawkish outlook from the US Federal Reserve, with Abu Dhabi, Qatar, and Saudi Arabia experiencing declines.
US markets closed with gains on Monday ahead of key economic data, including an increase in crude oil prices.
Saudi Arabia experienced a sharp decline in its foreign reserves, with a drop of over $16 billion last month, marking the largest decrease since the negative oil prices during the pandemic as the country invested in US stocks using its savings.
Oil prices in Asia extended gains from the previous session due to signs of a significant decrease in US crude stockpiles and concerns about potential supply disruptions caused by Hurricane Idalia.
U.S. stocks ended the week with solid gains, but mixed trading, as traders weigh whether the soft economic data will convince the Federal Reserve to hold off on further rate hikes.
Saudi Arabia's Tadawul All Share Index dropped 35.42 points, or 0.31 percent, to close at 11,455.78, with a total trading turnover of SR4.31 billion ($1.146 billion) and 106 stocks advancing and 104 declining.
Most stock markets in the Gulf ended lower as investors grew cautious due to volatile oil prices and awaited monetary policy decisions by the US Federal Reserve.
Saudi Arabia may face an economic contraction this year due to extended crude production cuts, which highlights its heavy reliance on oil and slow progress in diversification reforms, although a sizable dividend from Saudi Aramco is expected to provide some financial cushioning.
Most stock markets in the Gulf rose in response to a rise in oil prices, except for the Saudi index which closed lower; however, the International Monetary Fund predicts a further slowdown in Saudi Arabia's GDP growth due to the extension of oil production cuts.
Global markets ended higher as energy stocks climbed supported by Saudi Arabia and Russia's decision to extend supply cuts, while Wall Street's key indexes saw weekly declines due to investor concerns over interest rates and anticipation of upcoming U.S. inflation data. In Asian markets, Japan's Nikkei 225 ended down, Australia's S&P/ASX 200 was up, and Chinese shares rose following improved data on consumer price inflation. The Eurozone's economic growth outlook has been downgraded by the European Commission, and crude oil prices fell.
Most stock markets in the Gulf ended lower on Sunday due to profit-taking, except for the Egyptian index which reached a record high. Saudi Arabia's benchmark index dropped, highlighting the risk of economic contraction for the kingdom, while Egypt's blue-chip index gained, led by Beltone Financial Holding. UAE's Global Investment Holding also agreed to buy a stake in Egypt's main tobacco products maker.