Sept 12 (Askume) – Most Gulf stock markets rose on Thursday after U.S. inflation data raised the prospect of a rate cut by the Federal Reserve next week, while traders await more U.S. economic data.
The US consumer price index rose 0.2% in August , but underlying inflation stabilized, leading the Federal Reserve to cut interest rates modestly by 25 basis points at its upcoming meeting.
Federal Reserve policymakers are expected to begin long-awaited interest rate cuts next week as they seek to reduce the chance of a recession, though 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%, with Al Taiseer Group (4143.SE) gaining 1.6% and Al Rajhi Bank (1120.SE) adding 1%.
Other gainers included oil giant Saudi Aramco (2222.SE), which rose 0.4%.
Catalyst for Gulf financial markets –Oil prices rose more than 1% on concerns about the impact of Hurricane Francine on US output , although a gloomy demand outlook limited gains.
George Khouri, CFI’s global director of education and research, said that after the release of yesterday’s inflation data, the market’s optimism that the Federal Reserve may cut interest rates next week has been supported.
“In addition, the surge in oil prices has also provided some support, although this rise may be temporary. The Saudi market remains under pressure and may continue to decline.”
Dubai’s main stock index (.DFMGI) rose 0.4%, with blue-chip developer Emaar Properties (EMAR.DU) closing up 1.1%.
The board of Qatar National Bank (QNBK.QA), the Gulf region’s largest bank , approved a 2.9 billion riyal ($795.61 million) share buyback plan, sending the bank’s shares up 4.8%, pushing the Qatar Benchmark Index (.QSI) up more than 1.5 %.
Outside the Gulf, Egypt’s blue-chip index (.EGX30) was steady.
(1 USD = 3.6450 Qadriyal)
