Gulf stocks fall after cbanks hike interest rates

by Nadeshda Zareen

Gulf stocks were mainly lower on Thursday after regional central banks raised interest rates, following the U.S. Federal Reserve’s decision to hike rates by 25 basis points.


The U.S. Fed also signaled a faster pace of future rate hikes, with a possible three additional increases the next year.


“The markets did not expect three extra hikes next year,” Racha Al Khawaja, head of institutional coverage at Menacorp Financial Services, told Argaam.


She added the United Arab Emirates, Qatar, and Saudi Arabia are expected to feel the impact as they benefit from institutional flows.


“The outlook for higher interest rates in the U.S. is a risk to the emerging markets because investors will be attracted towards the higher yields being offered in the U.S.,” Jameel Ahmad, vice-president of corporate development and market research at FXTM, told Argaam.


In the UAE, Dubai’s main index fell 0.8 percent to 3,554 points, with the main drag coming from heavyweight Emaar Properties. The developer dropped 2.2 percent to AED 7.41.


Abu Dhabi’s general index was down 0.8 percent at 4,463 points, amid low volumes. Telecom stocks suffered with blue chip Etisalat losing another 0.5 percent at AED 18.35.


Ooredoo slumped 7.4 to AED 92.50 on ADX. In Qatar, where it is cross-listed, it fell 1.6 percent to QAR 99.


Qatar led regional declines as it fell 1.3 percent to 10,224 points.

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