Most Gulf markets are pulling back on Fed interest rate concerns and the oil price slump

Dec 11 (Reuters) – Most major Gulf stocks fell on Sunday on falling oil prices amid supply problems and uncertainty over a price cap for Russian oil, while the Egyptian index fell on price corrections.

The price of crude oil, which fuels the region’s growth, hit $76.10 a barrel in volatile trading Friday as growing recession fears wiped out any supply concerns following weak economic data from China, Europe and the United States.

Meanwhile, data on US producer prices also led to conflicting views, sparking hopes of a moderation in inflation but also fears that the Fed Reserve will have to keep interest rates high for longer.

Most Gulf Cooperation Council countries have pegged their currencies to the US dollar and closely monitor Fed policy moves, exposing the region to a direct impact of any monetary tightening there.

Farah Mourad, XTB MENA Senior Market Analyst, noted that GCC stock markets could see strong volatility later this week as the Federal Reserve meeting approaches.

“Oil prices may also see a further downward trend this week as recession fears may fuel demand, with the European price cap for Russian oil remaining a source of uncertainty,” Mourad added.

Saudi Arabia’s benchmark index (.TASI) fell 1.1%, with oil giant and heavyweight Saudi Aramco (2222.SE) falling 1.8% and luxury real estate developer Retal Urban Development Company (4322.SE) losing 0.7% .

However, Saudi National Bank (1180.SE) and ACWA Power (2082.SE) rose 2% and 4.4% respectively.

ACWA Power said Friday it has signed a $1.5 billion deal with Power China. read more

Saudi National Bank said in a stock market filing that it has acquired a 9.88% stake in Credit Suisse Group after the latter completed the last leg of its CHF 4 billion ($4.28 billion) fundraising by placing shares with a group of institutional investors led by Saudi National Bank.

Meanwhile, official data released on Sunday showed Saudi Arabia’s economy grew by 8.8% in the third quarter of 2022 compared to a year earlier, mainly driven by a surge in oil-related activities. read more

The Qatari index (.QSI) fell 0.4%, led by a 1% drop in Qatar Islamic Bank (QISB.QA) and a 0.8 drop in conglomerate Industries Qatar. (IQCD.QA)

Outside the Gulf, Egypt’s blue-chip index (.EGX30) also fell 1.7%, ending eight straight days of gains.

The meter briefly crossed the 15,000 mark, reaching its highest level in more than three years, boosted by the longest winning streak of the year.

Separately, Egypt’s Central Bank said on Thursday that the country’s core inflation rose in November from 19.0% in October to 21.5% year on year. read more

Reporting by Shamsuddin Mohd in Bengaluru

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