Mideast Stocks: Most Gulf Markets Ease as US Rate Cut Excitement Fades

Most stock markets in the Gulf ended lower on Monday mirroring global declines as excitement over a potential U.S. interest rate cut in September faded.

Federal Reserve Chair Jerome Powell on Friday signalled a possible rate cut at the Fed's meeting next month, saying that risks to the job market were rising but inflation remained a threat, and that a decision wasn't set in stone.

Saudi Arabia's benchmark index gave up early gains to edge 0.1% lower, hit by a 0.8% fall in the country's biggest lender Saudi National Bank. Elsewhere, oil giant Saudi Aramco dropped 0.3%.

Powell's dovish nod improved sentiment, with markets wagering an 87% chance of a quarter-point cut on Sept. 17, as per CME's FedWatch tool and 53.3 basis points of cumulative reductions by year-end, according to LSEG.

The Fed's stance holds significant implications for Gulf economies, where most currencies are pegged to the U.S. dollar, making it an anchor for regional monetary stability. 

The prospect of a rate cut next month could still support the market, said Osama Al Saifi, Managing Director for MENA at Traze.com.

"Meanwhile, oil prices remain a risk; despite the rebound, the overall trend is still pointing to the downside, and geopolitical developments will likely influence the market's next move."

Dubai's main share index gained 0.2%, with blue-chip developer Emaar Properties rising 1%. In Abu Dhabi, the index ended flat. 

The Qatari index lost 0.3%, weighed down by a 1.2% fall in the Gulf's biggest lender Qatar National Bank. Outside the Gulf, Egypt's blue-chip index was flat.

Egypt's central bank is likely to cut its key interest rates by 100 basis points on Thursday to support growth as inflation cools, a Reuters poll showed.

SAUDI ARABIA eased 0.1% to 10,898

Abu Dhabi was flat at 10,207

Dubai gained 0.2% to 6,135

QATAR fell 0.3% to 11,293

EGYPT was flat at 35,811

BAHRAIN was up 0.1% to 1,936

OMAN added 0.1% to 5,010

KUWAIT lost 0.1% to 9,246