The stock markets in the Gulf region experienced a positive trend on Sunday, with the Qatar index leading the way. This upward movement was a result of the slowing U.S. jobs growth in April, which raised hopes of early interest rate cuts by the U.S. Federal Reserve. The Labor Department’s employment report revealed that the U.S. economy added fewer jobs than expected, causing the unemployment rate to tick higher and wage growth to unexpectedly cool. This news prompted investors to anticipate the implementation of the Fed’s first rate reduction in September.
Following three consecutive sessions of losses, the Qatari benchmark index surged by 0.8% and all sectors ended in positive territory. Key players like Qatar National Bank, the region’s largest lender, and Industries Qatar saw notable gains of 1.2% and 0.7% respectively. This resurgence in the Qatari market indicates a renewed investor confidence in the region.
Similarly, Saudi Arabia’s benchmark index also witnessed a positive trend for the second consecutive session, with a 0.2% increase. The gains were primarily driven by the finance, industry, consumer discretionary, and energy sectors. Notable performers in the market included Al Rajhi Bank, the world’s largest Islamic lender, and Saudi National Bank, the kingdom’s biggest lender, both climbing by 1.5% each. Additionally, Thob Al Aseel, a garments supplier, reported a significant 44% rise in quarterly net profit, leading to a 3.5% increase in its stock value.
Despite a slowdown in new order growth, Saudi Arabia’s non-oil business activity maintained a steady rate of growth in April. A recent survey indicated that domestic demand was the primary driver of output in the region. This resilience in Saudi Arabia’s non-oil sector suggests a level of economic stability and diversification in the country’s market.
The optimistic performance of Gulf stock markets, particularly in Qatar and Saudi Arabia, following the news of slowing U.S. jobs growth demonstrates the interconnectedness of global economies. Investors in the region are closely monitoring U.S. monetary policy changes, as they often influence the market dynamics in Gulf countries due to their currency pegged to the dollar. As the Fed considers interest rate cuts, Gulf investors remain hopeful for continued market growth and stability in the coming months.