An investor walks through the Dubai Financial Market after Joe Biden won the US presidency November 8, 2020 in Dubai, United Arab Emirates. REUTERS/Christopher Pike
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August 29 (Reuters) – Gulf stock markets were mixed on Monday after firmer oil prices, a key catalyst for Middle East financial markets, partially offset heightened risks of tighter monetary policies in the United States and Europe.
European Central Bank Executive Board member Isabel Schnabel called on central banks to take strong action to combat inflation even if economies could slide into recession, and reinforced comments by US Federal Reserve Chair Jerome Powell, who announced tighter policies.
Most markets in the region traded retaliated in the previous session on anticipation of diluted global growth as priorities shifted from supporting the economy to fighting decades-high inflation.
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Most Gulf Cooperation Council countries have pegged their currencies to the US dollar and largely follow Fed policy moves, exposing the region to the direct impact of monetary tightening.
The Abu Dhabi Index (.FTFADGI) fell 0.7% of its value in its first session after comments supporting tighter monetary policy. Lenders slipped with First Abu Dhabi Bank (FAB.AD) and Abu Dhabi Islamic Bank (ADIB.AD) slipping 1.7% and 1.2% respectively.
Banks also drove the Dubai Index (.DFMGI) lower, trailed by a 0.8% decline in Dubai Islamic Bank (DISB.DU) and a 0.6% decline in Emirates NBD (ENBD.DU). was pulled down.
However, the leading index of Saudi Arabia (.TASI) recovered from Sunday’s slide as buoyant oil prices offset the impact of the tightening monetary policy outlook.
Oil prices rose after Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries and allies, collectively dubbed OPEC+, signaled they could cut production to balance the market.
The 0.4% gain in Saudi stocks was mainly driven by financials, with Al Rajhi Bank (1120.SE) up 0.2% and Alinma Bank (1150.SE) up 0.9%.
The Qatar Index (.QSI) was trading flat earlier in the day with financials and industrials pulling the market in opposite directions.
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Reporting by Shakeel Ahmad in Bengaluru; Edited by Sherry Jacob Phillips
Our standards: The Thomson Reuters Trust Principles.
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