GCC stock markets rebound after Fed comments

(MENAFN) On Tuesday, most Gulf stock markets experienced a rebound, buoyed by reassuring comments from Federal Reserve officials that helped stabilize market sentiment following a previous session's declines fueled by recession concerns. San Francisco Federal Reserve President Mary Daly commented that while it was too early to determine whether the July jobs report signaled a genuine slowdown or merely temporary weakness, it was crucial for the Federal Reserve to prevent the labor market from slipping into recession. This statement helped ease some of the fears surrounding potential economic downturns.

Traders maintained a 71 percent expectation that the U.S. central bank would implement a 50 basis point interest rate cut at its upcoming September meeting. This anticipation has a notable impact on Gulf Cooperation Council (GCC) countries, as their monetary policies are often aligned with the Federal Reserve due to their currencies being pegged to the dollar. In response to the market's reaction, the Saudi index climbed 1.5 percent, with Al-Taiseer Aluminum Products Group's shares surging by 9.9 percent. Additionally, Saudi Aramco's shares rose 1.5 percent following the company's impressive second-quarter net income of 109.01 billion riyals (USD29.03 billion), surpassing analysts' expectations.

In Dubai, the stock index jumped 2.3 percent, recovering from a significant drop of over 4 percent the previous day. The rise was bolstered by a 3.3 percent increase in shares of Emirates NBD, the largest bank in the emirate. This rebound reflects renewed investor confidence amid the Federal Reserve's statements and subsequent market adjustments. 

MENAFN07082024000045015682ID1108527055