Ahead of a meeting of central bankers from around the world in Jackson Hole, the majority of stock markets in the Gulf concluded the day on Thursday with gains, with the Saudi index ending three days of losses.
Gulf markets in black: A series of weak manufacturing surveys had rekindled optimism that central banks had stopped tightening monetary policy, but that could alter depending on the remarks made by Federal Reserve Chair Jerome Powell at the annual summit in Wyoming on Friday.
Since the majority of regional currencies are pegged to the U.S. dollar, oil and gas exporting nations in the Gulf tend to follow the Fed’s changes in interest rates. The only currency linked to a currency basket that includes the dollar is the Kuwaiti dinar.
The benchmark index for Saudi Arabia increased by 0.3%, with gains from Saudi National Bank of 1% and Saudi Aramco of 0.4%.
Hani Abuagla, senior market analyst at XTB MENA, reported that the Saudi stock market stabilised to some extent and traded sideways this week despite the uncertainty that engulfed the energy markets.
If oil prices experience another drop next week, “new price corrections could expose the main index.”
Oil prices, which are a driving force behind the financial markets in the Gulf, stabilised after initial falls brought on by unimpressive economic data from important economies, as investors awaited Powell’s speech for cues.
Due in part to a 1.6% increase in Emirates Central Cooling Systems Corp., Dubai’s main stock index increased by 0.2%.
Index growth in Abu Dhabi was 0.4%.
Industries Qatar, a producer of petrochemicals, increased 1.8% while the Qatari benchmark closed 0.3% higher.
Egypt’s blue-chip index increased 0.4% outside of the Gulf.
Near the pinnacle of this year, the Egyptian stock exchange encountered more obstacles. According to Abuagla, declining trade volumes could increase negative risks in the upcoming trading sessions.