Mideast Stocks: Major Gulf Markets Retreat After Wall Street Rally Stalls

Major stock markets in the Gulf fell in early trade on Thursday after Wall Street snapped a long winning streak that had been driven by rate-cut expectations and the Federal Reserve’s dovish tilt.

Most Gulf Cooperation Council countries, including the UAE, have their currencies pegged to the U.S. dollar and follow the Fed’s policy moves closely, exposing the region to the direct impact of monetary tightening in the world’s largest economy.

Saudi Arabia’s benchmark stock index dropped 0.8%, dragged down by a 2.4% fall in auto rental firm Lumi and a 0.6% decline in oil behemoth Saudi Aramco.

Oil prices – a catalyst for the Gulf’s financial markets -fell and were on track to snap a three-day winning streak, as concerns over low demand following a surprise U.S. crude inventory build outweighed jitters over global trade disruptions due to tensions in the Middle East.

Dubai’s main share index eased 0.2%, with Emaar Properties down 0.9%.

In Abu Dhabi, the benchmark stock index fell 0.2%.

The Qatari benchmark fell 0.3%, with petrochemical maker Industries Qatar losing 0.8% and telecoms firm Ooredoo down 1.3%.