Most Gulf markets ease as Fed uncertainty persists

News Lead

Most Gulf stock markets declined on Thursday as investors remained cautious ahead of the US Federal Reserve's policy meeting next week, which could provide clues about the pace of future interest rate hikes.

Market Summary

The Saudi index fell 0.5%, weighed down by losses in financial and petrochemical shares. The Dubai index lost 0.3%, with real estate and banking stocks leading the decline. The Abu Dhabi index eased 0.2%, dragged down by energy and telecom stocks.

Bucking the trend, the Qatar index rose 0.2%, supported by gains in banking and industrial stocks. The Oman index was flat.

Fed Uncertainty

Investors are awaiting the Fed's policy meeting next week for clues about the pace of future interest rate hikes. The Fed is widely expected to raise rates by 25 basis points, but investors are keen to hear about the central bank's plans for the rest of the year.

The Fed has been raising rates aggressively in an effort to fight inflation, which is at a four-decade high in the US. However, the central bank is also mindful of the impact of rate hikes on economic growth.

Market Outlook

Analysts say that the Fed's decision next week will be key for the direction of Gulf stock markets in the coming months.

"The Fed's decision will provide investors with more clarity about the outlook for interest rates and the global economy," said a Dubai-based analyst.

"If the Fed signals that it is becoming more dovish, this could support risk appetite and lead to a recovery in Gulf stock markets," he added.