Most Gulf stock markets rose on Thursday after central banks cut interest rates, following the U.S. Federal Reserve‘s rate cut. Saudi Arabia, UAE, and Qatar indices gained amid positive economic momentum.
Bollywoodfever: Most stock markets across the Gulf ended higher on Thursday, as central banks in the region cut their key interest rates following a significant policy easing by the U.S. Federal Reserve.
On Wednesday, the Fed lowered its benchmark rate by 50 basis points (bps), with policymakers expecting an additional 0.5% reduction by year-end.
Saudi Arabia’s benchmark index climbed 1.3%, driven by a 2% surge in Al Rajhi Bank shares.
The Saudi Central Bank responded to the Fed’s move by cutting both its repurchase agreement (Repo) rate and reverse repo rate by 50 bps each, bringing them to 5.5% and 5%, respectively.
Saudi Aramco, the kingdom’s oil giant, also saw a positive uptick of 1.1%. While oil prices—crucial for Gulf financial markets—gained after the Fed’s rate cut, Brent crude remained below $75, reflecting concerns over weak global demand.
Dubai’s primary share index rose 0.7%, led by a 1.2% increase in Emaar Properties, a leading blue-chip developer. In Abu Dhabi, the index closed 0.8% higher.
The United Arab Emirates’ central bank followed the trend by reducing its base rate on the overnight deposit facility by 0.5% to 4.90%.
Monetary policy in the Gulf Cooperation Council (GCC) closely follows the U.S. Federal Reserve, as most GCC currencies are pegged to the U.S. dollar.
Qatar’s stock market also performed well, with its benchmark index closing 0.6% higher, boosted by a 2% rise in Qatar National Bank.
Qatar’s central bank had previously cut its key interest rates by 55 basis points.
Outside the Gulf, Egypt’s blue-chip index advanced 2%, with Commercial International Bank Egypt rising by 1.8%.
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