A pivotal week awaits most Gulf markets in the red as rate cut hopes loom.


In early trade on Monday, most major Gulf stock markets declined in tandem with Asian shares in anticipation of a week filled with central bank meetings and U.S. inflation data that may or may not confirm market expectations for an early and rapid round of rate cuts in the coming year. A pivotal week awaits most Gulf markets in the red as rate cut hopes loom.

This week, investors are awaiting data on U.S. inflation and guidance on interest rate policies from five central banks, including the Federal Reserve, in anticipation of their effects on oil demand and the global economy.

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Fed decisions typically dictate monetary policy in the Gulf Cooperation Council (GCC), which consists of six members due to the linkage of the majority of regional currencies to the U.S. dollar.

The benchmark index of Saudi Arabia declined by 0.2%, led by 0.6% declines in Elm Co and Al Rajhi Bank.

In contrast, the hydrocarbon behemoth Saudi Aramco increased by 0.2%.

As a result of U.S. efforts to replenish strategic reserves, oil prices increased for a second consecutive session, extending gains. However, concerns about crude oversupply and sluggish fuel demand growth in the coming year persisted.

The primary share index in Dubai declined by 0.3%, led by a 1.1% decline in Emaar Properties and a 0.7% decline in sharia-compliant lender Dubai Islamic Bank.

The Abu Dhabi index remained unchanged.

The Qatari benchmark declined 0.2% and was poised to close with a loss for the seventh consecutive session, while Qatar National Bank, the largest lender in the Gulf, dropped 0.8%.

Monday saw Israeli tanks attempt to advance further west in their conflict against Hamas in the vicinity of Khan Younis, the principal city of the southern Gaza Strip. At the same time, United Nations officials reaffirmed their calls for a ceasefire to prevent a humanitarian catastrophe.