Most of the Gulf markets closed lower as the risks of a US interest rate hike increased

Most stock markets in the Gulf closed lower today, Monday, after US jobs data indicated the strength of the labor market and increased expectations that the Federal Reserve (US Central Bank) will raise interest rates at its meeting next month.

The main Saudi stock market index fell 0.6%, affected by the decline in the share of Al-Rajhi Bank by 1.6%, and the share of the Retal Urban Development Company by 0.8%.

The historic low unemployment rate in the United States and rising wages are likely to keep the Federal Reserve on track to raise interest rates by a quarter of a percentage point next month, as risks of a financial crisis recede and inflation fears remain high.

Most Gulf currencies are pegged to the dollar, and Qatar, Saudi Arabia and the UAE usually track the United States in any change in monetary policy.

After the Saudi market reached its peak this year, some price corrections could be recorded as traders moved to lock in their gains, said Daniel Taqi Eldin, CEO of the Middle East and North Africa region at BD Suisse.

He added that “strong fundamentals” could lead the index to recovery later.

In Qatar, the index fell 0.2%, affected by the 1.8% drop in the Commercial Bank’s share.

Shares of Qatar National Bank, the largest Gulf bank by assets, rose 0.3%, after announcing an increase in first-quarter profits.

The Abu Dhabi index also rose 0.4%, according to Reuters.

Outside the Gulf region, the Egyptian index of leading stocks rose 0.6%, supported by a jump in the shares of El Sewedy Electric, which increased by more than 5%.

Data from the Central Agency for Public Mobilization and Statistics showed today, Monday, that urban inflation rose to 32.7% in March on an annual basis, which is slightly less than the highest record rate recorded so far, and slightly more than inflation in February, which recorded 31.9%.

Taqi El-Din said that the rise in inflation less than expected supported the Egyptian stock market, but indicated that the level is still high and that this contributed to raising the fears of international investors, which means that they could “maintain the selling trend.”