Jan 19 (Reuters) – Most major Gulf stock markets fell in early trade on Thursday as weak US consumer data sparked recession fears around the world, although the Qatari Index rose higher, ending a seven-day losing streak.
US retail sales fell by the sharpest drop in a year in December, dragged down by lower purchases of autos and a range of other goods, putting consumer spending and the broader economy on a weaker growth path into 2023.
Widespread signs of weaker demand and slowing inflation are likely to encourage the US Federal Reserve to further moderate the pace of its interest rate hikes next month, but not pause its monetary tightening once the labor market remains tight.
Most Gulf currencies are pegged to the dollar, and Qatar, Saudi Arabia, and the United Arab Emirates usually reflect any change in monetary policy in the United States.
The benchmark index of Saudi Arabia (.TASI) fell 0.3%, hit by a 1% decline in Retal Urban Development Co (4322.SE), while Saudi Kayan Petrochemical Company (2350.SE) Production units for regular maintenance fell 2.8% a day after the announcement of the closure of some shares.
Oil futures — a key catalyst for Gulf financial markets — fell nearly $1, extending losses from the previous day as a surprise surge in US crude inventories weighed on the market, along with fears of a recession fueled by disappointing US earnings Retail sales were strengthened and output data.
Dubai’s main stock index (.DFMGI) slipped 0.2%, hit by a 0.7% decline in Salik Company (SALIK.DU), the operator of the emirate’s exclusive road toll system.
In Abu Dhabi, the index (.FTFADGI) was down 0.4%, weighed down by a 0.4% decline in conglomerate International Holding (IHC.AD).
However, the Qatari Index (.QSI) bucked the trend, trading 0.9% higher on its way to ending a seven-day losing streak.
Reporting by Ateeq Shariff in Bengaluru; Edited by Sherry Jacob Phillips
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