Gulf Markets Slip as Oil Prices Rebound Amid Fed Rate Speculation and Dollar Strength - APM Capital Market Report

(MENAFN- Matrix PR) - Mark Pussard, Head of Risk, APM Capital

13th November 2024

GCC market
Most stock markets in the Gulf ended lower on Wednesday ahead of crucial U.S. inflation data that will offer more clarity on the pace of the Federal Reserve's interest rate reductions.

Saudi Arabia's benchmark index declined 1%, weighed down by a 1.7% fall in aluminum products manufacturer Al Taiseer Group and a 1.9% decrease in Al Rajhi Bank

Dubai's main share index gained 0.7%, led by a 4.7% jump toll operator Salik Company SALIK after reporting a rise in third-quarter net profit.

In Abu Dhabi, the index FADGI fell 0.5%, with conglomerate International Holding losing 0.8%.

The Qatari benchmark GNRI dropped 0.4%, with petrochemical maker Industries Qatar losing 1.2%.

Commodities
Oil prices rebounded on Wednesday, settling higher on short-covering a day after they fell near a two-week low on OPEC’s reduced demand forecast, but crude’s gains were limited as the dollar hit a seven-month high.

Brent crude futures settled up 39 cents, or 0.54%, to $72.28 a barrel. U.S. West Texas Intermediate crude (WTI) futures gained 31 cents, or 0.46%, to $68.43.

Gold prices continued their downward momentum on Wednesday, falling a further 1% to $2,573 per ounce.

Wallstreet market
The Dow and the S&P 500 ended slightly higher on Wednesday while the Nasdaq lost ground after October data showed consumer prices rising in line with expectations, adding support to bets that the U.S. Federal Reserve will cut interest rates in December.

The Dow Jones Industrial Average rose 47.21 points, or 0.11%, to 43,958.19, the S&P 500 gained 1.39 points, or 0.02%, to 5,985.38 and the Nasdaq Composite lost 50.66 points, or 0.26%, to 19,230.74.

However, the benchmark 10-year yield regained ground after the data and rose as high as 4.46% as investors focused on longer-term expectations that President-elect Donald Trump's policies could exacerbate inflation.

European market
European shares ended Wednesday on a dour note, with the STOXX 600 closing at a three-month low as rising energy shares countered real estate losses, while focus remained on a U.S. inflation print that could alter market expectations about the Federal Reserve's interest rate path.

The pan-European STOXX 600 index SXXP closed down 0.1% at 501.59 points, its lowest level since Aug 13.

Shares in London’s Blue-chip index edged into the black after briefly falling below 8000 for the first time since April, outperforming European German and French large-cap indices. The FTSE 100 edged up 0.1% or 4.56 points to 8030.33, while the FTSE 250 index of midcap companies dipped 0.3%.

At the close in Frankfurt, the DAX lost 0.16% or 30.53 points to 19,003 while the MDAX index lost 0.79%, and the TecDAX index declined 1.41%.

Asian market
Asian stock markets tracked lower Wednesday on overnight Wall Street cues and the unfolding earnings season. Easing commodities prices dented resource issues.

Hong Kong and Tokyo finished in the red, although Shanghai notched a gain. Most other regional exchanges lost ground.

The Hang Seng Index fell by 0.12%, or 23.43 points, to close Wednesday's session at 19,823.45. The Hang Seng China Enterprises Index rose marginally by 0.05%, or 3.79 points, to close at 7,130.93.

In Japan, the Nikkei 225 opened evenly but declined to the close, finishing off 1.7% as traders mulled a producer prices report and earnings season results.

Japan's benchmark Nikkei average closed down 1.66% at 38,721.66 on Wednesday, while the broader TOPIX shed 1.22% at 2,708.00.

FX
The U.S. dollar advanced to one-year high against major currencies on Wednesday powered by so-called Trump trades and after U.S. inflation for October came in as expected, suggesting the Federal Reserve may be more cautious in lowering interest rates.

The dollar index DXY, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.43% to 106.44 after reaching as high as 106.53.

The yen broke through 155 per dollar, the Japanese currency's weakest level since late July. It was last at 155.46 yen per dollar.

The euro was down 0.51% at $1.0569. It had dropped to as low as $1.055575, its lowest level since November 2023.

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