Sept 17 (Askume) – Most Gulf stock markets fell on Tuesday ahead of a U.S. interest rate decision. Traders expect a sharp drop in interest rates.
Investors are focused on the Federal Reserve’s two-day policy meeting ending on Wednesday, which is likely to add support for last week’s 50 basis point interest rate cut.
Following media reports on the possibility of resuming more aggressive easing policies , the market currently believes the probability of a 50 basis point interest rate cut is 65%, up from 34% a week ago.
Monetary policy in the Gulf Cooperation Council (GCC), which includes the UAE, generally follows the Fed’s decisions, as most regional currencies are pegged to the US dollar.
Qatar’s benchmark index (.QSI) fell 0.4%, with Qatar Islamic Bank (QISB.QA) and sharia-compliant bank Masraf Al Rayan (MARK.QA) each dropping 1%.
Milad Azar, market analyst at XTB MENA, said investors remained cautious and booked profits ahead of the Federal Reserve’s interest rate decision.
Dubai’s main share index (.DFMGI) was steady.
Saudi Arabia’s benchmark index (.TASI) rose 0.2%, led by aluminum products maker Al Taseer Group.(4143.SE) gained 3.1% .
Analyst Azar said a possible interest rate cut by the Federal Reserve is expected to have a positive impact on market sentiment, as it could prompt the Saudi Arabian Central Bank to take similar measures to improve business conditions.
“Moreover, oil prices will continue to play a decisive role in market performance.”
Among other gainers, Saudi Arabian Mining Co. (Ma’Aden) (1211.SE) rose 6.6% a day after trading higher along with Bahrain Aluminum Co. (Alba) (ALBH.BH) .
On Sunday, U.S. aluminum producer Alcoa said it would sell a 25.1% stake in its joint venture with Madden to the company for about $1.1 billion in cash and stock.
In Bahrain, the Alba Index (.BAX) rose 3.8%, driven by a 20% rise.
Outside the Gulf, Egypt’s blue-chip index (.EGX30) fell 0.3% and Commercial International Bank (COMI.CA) dropped 0.5%.
