Most Gulf markets fall ahead of expected rate hike

May 3 (Reuters) – Most stock markets in the Gulf region ended lower on Wednesday, with the Saudi index posting its biggest intraday drop in nearly two months, ahead of an expected rate hike by the Federal Reserve later in the day.

To curb inflation, the Federal Reserve is expected to raise interest rates by 25 basis points on Wednesday, while the European Central Bank is also expected to raise rates at its regular policy meeting on Thursday.

Most GCC countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the dollar and closely monitor the Fed’s policy moves, exposing the region to the immediate impact of monetary tightening in the world’s largest economy.

Saudi Arabia’s benchmark index (.one) Al Rajhi Bank fell 1.3% (1120.SE) fell 1.5 percent, while Alima Bank (1150.SE) Shares of the bank fell 5.7% as the bank missed market expectations for the first quarter.

In Abu Dhabi, the index (.FTFADGI) fell 0.3%, with the country’s largest lender First Abu Dhabi Bank (FAB.AD) down 0.9%.

Oil Prices – Catalyst for Gulf Financial Markets – Extend the loss After plunging 5 percent in the previous session, investors were concerned about the health of the U.S. economy ahead of an expected rate hike by the Federal Reserve.

Dubai main stock index (.DFMGI) Inched up 0.1 percent, helped by a 3.7 percent rise in Tecom Group (TECOM.DU) This comes after the business park operator reported a 34 percent jump in first-quarter net profit.

Qatar benchmark (.QSI) Telco Ooredoo rises 1.5%, marking sixth straight session of gains (ORDS.QA) An increase of more than 5%.

Beyond the Gulf, Egypt’s blue-chip index (.EGX30) Finish flat.

Non-Oil Private Sector Activities in Egypt zoom out A survey on Wednesday showed business confidence fell for a 29th straight month in April as restrictions on imports and currency and a surge in prices sent business confidence to a record low.

The S&P Global Egypt Purchasing Managers’ Index (PMI) rose to 47.3 in April from 46.7 in March, but remained below the 50.0 threshold that marks activity growth.

Reporting by Ateeq Shariff in Bengaluru; Editing by Barbara Lewis

Our standards: Thomson Reuters Trust Principles.