Most Gulf exchanges fall on recession fears

An investor monitors a screen showing stock information at the Abu Dhabi Stock Exchange on June 25, 2014.

Sept 22 (Reuters) – Most Gulf stock markets extended losses on Thursday after the Federal Reserve sharply raised U.S. interest rates and is expected to accelerate further rate hikes to curb inflation.

Federal Reserve Chairman Jerome Powell vowed on Wednesday that he and his policymakers will “continue” to fight inflation as the central bank raised interest rates by 75 basis points for the third straight time and signaled that borrowing costs will continue to rise. year. read more

Dubai’s main stock index (.DFMGI) Down 0.8%, hit by a 1.5% drop in Dubai Electricity and Water Authority (DEWAA.DU) Shariah-compliant lender Dubai Islamic Bank down 1.1% (DISB.DU).

Most GCC countries, including the United Arab Emirates, have their currencies pegged to the dollar and generally follow the Fed’s policy moves, directly exposing the region to the risk of a U.S. monetary tightening.

In Abu Dhabi, the index (.FTFADGI) Complete flat.

Fadi Reyad, chief market analyst at CAPEX.com, said the Abu Dhabi Exchange was supported by stronger oil prices, while higher interest rates dented sentiment.

“However, if investors act to secure their gains, there could be some price correction in the market following the gains recorded this month.”

Crude oil prices rose after a string of central bank interest rate hikes including the Bank of England, as the prospect of increased Chinese demand and heightened geopolitical risks outweighed recession fears.

Qatar Benchmark (.QSI) Down 0.9%, most stocks in the index are in negative territory, including Qatar Islamic Bank (QISB.QA)down 1.1%.

Beyond the Gulf, Egypt’s Blue Chip Index (.EGX30) It fell 0.2%.

** Saudi Arabia is closed for a public holiday.

Reporting by Ateeq Shariff in Bengaluru; Editing by Krishna Chandra Eluri

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