Saudi stock market gains on hopes of federal interest rate cut

(MENAFN) Saudi Arabia's Stock market experienced an upswing on Sunday, buoyed by the recent speech delivered by US Federal Reserve Chairman Jerome Powell at the Jackson Hole Economic Symposium. Powell's remarks, which indicated that the US would soon start reducing interest rates, sparked optimism in global markets. He stated that "the time has come" to cut rates, noting that the risks of rising inflation had decreased. Powell's comments suggested a possible rate cut at the next policy meeting, the first in over four years, and expressed confidence that inflation was nearing the Fed's 2 percent target. This stance generally influences monetary policy in the six Gulf Cooperation Council (GCC) countries, as their currencies are often pegged to the US dollar.

Following Powell's speech, Saudi Arabia's main stock index rose by 0.6 percent. This gain was supported by a significant jump in Saudi Telecom Co (STC) shares, which surged 9.9 percent after the company announced a quarterly dividend of 0.55 riyals per share for the next three years, starting in the fourth quarter. Additionally, shares of oil giant Saudi Aramco saw a 0.7 percent increase. The rise in oil prices, which climbed over 2 percent per barrel on Friday, also contributed to the positive market sentiment. This increase followed a period of decline due to higher US crude inventories and a weaker demand outlook in China.

Conversely, the Qatari stock index declined by 0.2 percent, primarily due to a 0.7 percent drop in Qatar Islamic Bank shares. Outside the Gulf region, Egypt's blue-chip index also fell by 0.2 percent, with Commercial International Bank-Egypt's shares decreasing by 1.1 percent. 

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