Although the Qatari index crept up to end a seven-day losing run, the majority of the main stock markets in the Gulf fell in early trade on Thursday as disappointing US consumer data fanned recession worries throughout the world.
Retail sales in the US decreased by the most in a year in December, with lower purchases of cars and a variety of other commodities contributing to the decline. This puts consumer spending and the economy as a whole on a worse growth path going into 2023.
The US Federal Reserve is likely to slow down rate hikes even more next month in response to widespread indications of declining demand and falling inflation. However, it won’t suspend its tightening of monetary policy as soon as the labor market is still tight.
The majority of Gulf currencies are tied to the dollar, and Qatar, Saudi Arabia, and the United Arab Emirates often follow changes in American monetary policy.
Retal Urban Development Co.’s 1% decline hurt Saudi Arabia’s benchmark index, which fell 0.3%. Saudi Kayan Petrochemical Company’s 2.8% decline came a day after it announced the stoppage of some production facilities for routine maintenance.
A surprising increase in US crude stocks and recessionary fears raised by dismal US retail sales and output figures caused oil futures, a major driver of the Gulf’s financial markets, to decline by about $1, extending losses from the previous day.
Salik Company, the company in charge of the emirate’s unique road toll system, had a 0.7% decline, contributing to a 0.2% decline in Dubai’s main stock index. The conglomerate International Holding’s 0.4% loss in value contributed to a 0.4% decline in the index in Abu Dhabi.
However, the Qatari index defied the trend and moved 0.9% higher, on track to snap a seven-day losing skid.