Most Gulf stock markets ended trading lower on Monday and the Saudi Arabian index recorded its lowest level in more than 18 months, with OPEC Plus group holding its production target level and traders awaiting the Federal Reserve (Central Bank of the United States) meeting scheduled for next week.
And OPEC Plus decided, at its meeting yesterday, Sunday, to keep its target oil production levels unchanged, at a time when oil markets are struggling to assess the impact of the slowdown in the Chinese economy on demand, and the impact of the ceiling imposed by the Group of Seven on Russian oil supplies.
The Saudi index fell 2.8%, to its lowest level since May 2021, impacted by a 3.8% drop in Al Rajhi Bank’s share and a 1.8% drop in Retal Urban’s share Development Company.
Fadi Riyadh, chief market analyst at Capix.com, said the decline in the Saudi stock market came as concerns about oil markets and the global economy continued to impact traders’ expectations.
“However, the market could find some support with the continued strong performance of the local economy,” he added.
A survey showed on Monday that Saudi Arabia’s non-oil private sector grew at the fastest pace in seven years in November, supported by a sharp increase in new orders and continued confidence in the growth outlook.
The Abu Dhabi index fell by 0.8%.
Federal Reserve Chairman Jerome Powell said on Wednesday that the US central bank could slow the pace of interest rate hikes “as soon as December,” but warned that the fight against inflation is not over yet.
Policy makers meet at the US Central Bank on December 13 and 14.
The currencies of most Gulf Cooperation Council countries are pegged to the dollar, and these countries generally follow Federal Reserve policy, which makes the region directly affected by any monetary tightening by the US Central Bank.
The Qatar index fell 0.8%, with Petrochemical Industries Qatar down 3%.
The Dubai index rose 0.8%, extending its gains for the second session, supported by a 1.8% increase in the main share of Emaar Properties.
Outside the Gulf region, Egypt’s leading index rose 1.8%, supported by a 3.9% increase in the Commercial International Bank’s share.
Riyadh said the Egyptian market continued to grow, with local investors maintaining high buying volumes.