Sept 12 (Askume) – Major Gulf stock markets rose in early trade on Thursday after better U.S. inflation data paved the way for an interest rate cut by the Federal Reserve next week, while traders expected more economic data from the United States.
The US consumer price index rose 0.2% in August , but underlying inflation stabilized, which could lead to a modest 25 basis point interest rate cut by the Federal Reserve at its upcoming meeting.
Federal Reserve policymakers are likely to begin long-awaited rate cuts next week as they seek to reduce the chance of a recession, even if underlying price pressures prevent them from taking more aggressive action.
Monetary policy in the six-member Gulf Cooperation Council, which includes Saudi Arabia, is generally guided by decisions of the Federal Reserve, as most regional currencies are pegged to the U.S. dollar.
Saudi Arabia’s benchmark index (.TASI) rose 0.7%, ending a streak of losses, while Al Tayseer Group (4143.SE) added 1.1%.
Saudi Arabia’s non-oil sector grew at a modest pace in August from the previous month’s two-year low, helped by new orders and job gains, a survey showed on Tuesday.
Other gainers included oil giant Saudi Aramco (2222.SE), which rose 0.7%.
The catalyst for Gulf financial markets was that oil prices rose more than 1% on concerns about the impact of Hurricane Francine on production in the United States, the world’s top crude oil producer, although concerns about a drop in demand limited gains.
Dubai’s main stock index (.DFMGI) rose 0.4%, with blue-chip developer Emaar Properties (EMAR.DU) gaining 0.8%.
The Abu Dhabi index (.FTFADGI) was flat.
Shares in Qatar National Bank (QNBK.QA), the Gulf region’s biggest bank , rose 5.5% a day after it raised 2.9 billion riyals ($795.61 million) in a share buyback, pushing the Qatari benchmark index (.QSI) up 1.8%.
(1 USD = 3.6450 Qadriyal)
