Saudi Arabia ends 4-game losing streak in wider Gulf rebound

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Bahraini traders are seen at the Bahrain Stock Exchange in Manama, Bahrain November 4, 2020. REUTERS/Hamad I Mohammed

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Sep 20 (Reuters) – Most Gulf stock markets rebounded on Tuesday, with the Saudi index posting a four-day losing streak, as investors weigh bets of a Reserve interest rate hike federal later this week.

The Federal Reserve is likely to raise U.S. borrowing costs faster and further than expected after data last week showed core inflation was widening rather than easing as expected. Read more

Most Gulf Cooperation Council countries, including Saudi Arabia, have their currencies pegged to the dollar and generally follow Fed policy decisions, exposing the region to a direct impact from monetary tightening.

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Saudi Arabia’s benchmark index (.TASI) rose 0.5%, ending four losing sessions, buoyed by a 2.3% rise in the kingdom’s biggest lender, Saudi National Bank (1180.SE).

Dubai’s main stock index (.DFMGI) gained 0.7%, led by a 1.6% rise in prime developer Emaar Properties (EMAR.DU) and a 1.3% advance in compliance lender Shariah Dubai Islamic Bank (DISB.DU).

In Abu Dhabi, the index (.FTFADGI) gained 0.4%, helped by a 1% gain in International Holding Co (IHC.AD), after the conglomerate announced it had decided to acquire a 15 % in Burjeel Holdings via one unit.

The Qatari index (.QSI) ended up 0.6%, with petrochemicals maker Industries Qatar (IQCD.QA) climbing 2%.

Crude prices, a key catalyst for Gulf financial markets, rose as OPEC and its allies produce less than their quotas, but were heading for a fourth monthly decline ahead of an expected hike in U.S. interest rates that could dampen economic growth and fuel demand.

Outside the Gulf, Egypt’s blue chip index (.EGX30) closed 1% higher.

Egypt’s central bank will raise its overnight deposit rate by 100 basis points (bps) on Thursday as it tries to rein in rising inflation, a Reuters poll predicted. Read more

The median forecast from a poll of 15 analysts is for the bank to raise its deposit rate to 12.25% and its lending rate to 13.25% at its regular monetary policy committee meeting.

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Reporting by Ateeq Shariff in Bangalore; Editing by Vinay Dwivedi

Our standards: The Thomson Reuters Trust Principles.

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