Stock markets in the Gulf showed positive movement on Sunday, with the Saudi index leading the gains. After hitting a five-month low, the benchmark index in Saudi Arabia rose by 1.1%. This increase was driven by growth in various sectors, particularly in IT, utilities, and healthcare stocks. Notable performers included ACWA Power with a 4.4% gain and Saudi National Bank, the largest lender in the kingdom, adding 1.8%. Despite these advancements, Saudi Aramco experienced a 1.9% decline, reaching its lowest level in over a year.
The Qatari benchmark index also saw a positive trend, rising for the second consecutive session by 0.7%. Energy, finance, and real estate sectors contributed to this growth, with companies such as Qatar Fuel Co and Qatar Gas Transport showing significant gains. The recent U.S. inflation data, meeting market expectations in April, instilled hope for potential interest rate cuts by the Federal Reserve. Given that most Gulf currencies are pegged to the dollar, the monetary policy changes in the U.S. often impact countries like Saudi Arabia, the United Arab Emirates, and Qatar.
In contrast to the Gulf markets, Egypt’s blue-chip index experienced a decline for the fifth consecutive session, ending 0.2% lower. This dip was widespread across various sectors, with companies like Eastern Company and Talaat Mostafa Group facing notable losses. However, there were exceptions to this downward trend, as Juhayna Food managed to rise by 2.5% following a 41% increase in its first-quarter net profit.
Overall, the reaction of Gulf stock markets to the U.S. inflation data demonstrates the interconnectedness of global financial systems. Investors in the region closely monitor developments in major economies like the United States, as they anticipate the ripple effects on their own markets. As geopolitical and economic landscapes continue to evolve, these correlations are likely to persist, influencing trading behaviors and market trends in the Gulf and beyond.