GCC stock markets rise on anticipation of U.S. interest rate cuts

(MENAFN) On Thursday, most Gulf stock markets experienced gains following the release of minutes from the U.S. Federal Reserve's latest meeting, which hinted at imminent interest rate cuts. The minutes from the Fed's July 30-31 meeting suggested that a substantial majority of officials anticipated a rate reduction in September. This expectation has spurred positive movement in regional markets. Upcoming American economic data, including the Purchasing Managers Index and unemployment claims, are also anticipated to influence market sentiment.

In line with the Fed’s projected policy shift, futures markets are almost fully expecting a 25 basis point cut next month, with some forecasts predicting a 50 basis point reduction. By the end of 2025, projections indicate an average 222 basis point cut in the U.S., compared to 163 basis points in Europe. The monetary policy of the six Gulf Cooperation Council (GCC) countries typically mirrors the Fed’s actions due to their currencies being pegged to the dollar. On Thursday, Saudi Arabia's benchmark index rose by 0.1 percent, buoyed by a 1.7 percent increase in shares of Middle East Pharmaceutical Industries (Avalon Pharma). Dubai's main stock market index gained 0.3 percent, driven by a 2.1 percent rise in Emirates NBD shares, while Abu Dhabi’s index also climbed 0.3 percent. The Qatari index remained largely unchanged. Oil prices, a key factor for Gulf financial markets, stabilized after a four-day decline, supported by a decrease in U.S. fuel inventories despite ongoing concerns about global demand.  

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