Gulf stocks retreat after Fed has hinted that they will not cut rates

(Reuters) – The Gulf stock markets fell on Thursday after the US Federal Reserve cut interest rates by 25 basis points, while pointing out that the move may not be a sign of a spike. a long cycle of monetary easing.

Markets were waiting for a signal from the Fed that the cut would be followed by further cuts.

Central banks in Saudi Arabia, the United Arab Emirates and Qatar have followed the example of the Federal Reserve and have reduced their interest rates evenly. The currencies of these countries are indexed to the US dollar and follow the measures taken by the Federal Reserve with regard to interest rates.

Banks' shares have been hit hard, interest rate cuts are expected to affect profit margins.

The Saudi index fell 0.8% and the Samba Financial Group fell 4.3% to its lowest level since January 2nd. It became the first bank to post a drop in profits in the second quarter, with a drop of about 25% due to soaring operating costs.

Al Rajhi Bank fell 1.7% after posting a strong increase in its commercial results.

Analysts expect the decline in interest rates to affect profit margins for Saudi banks, which recorded a record profit of about 50 billion riyals ($ 13.3 billion). in 2018, after several times raising interest rates in recent years.

Saudi Basic Industries Corp (SABIC) lost 0.9% after announcing earlier this week its lowest quarterly profit since the end of 2009.

In Abu Dhabi, the stock index lost 1.7%, its biggest daily loss since mid-May, under the effect of Abu Dhabi's top heavyweights, 1.8%, and the Commercial Bank of Abu Dhabi, 1%.

The Abu Dhabi Commercial Bank (ADCB) recorded an 11% drop in second quarter earnings this year in the first consolidated financial statements following its merger with Union National Bank and Al Hilal Bank earlier this year.

The Qatar index fell 1%, while the Qatar National Bank (QNB.KW: Quote, Profile, Research), the largest lender in the Gulf, lost 1% and Qatar Islamic Bank (QIB) ) by 2%.

The Dubai index fell 0.6%, and that of Emirates NBD 0.4%.

Real estate stocks were the biggest pressure on the index. Emaar Properties fell 1.5% after rising in recent sessions following a major deal in China.

In Egypt, the main stock index broke the downtrend and closed up 0.9%. Commercial International Bank, the largest bank listed on the stock market, was the most favorable to the index, with an increase of 2.3%.

Here are the closing levels of the Middle East stock indexes:

– Saudi Arabia .. The index fell 0.8% to 8666 points.

– Abu Dhabi – The index fell 1.7% to 5230 points.

– Dubai: The index fell 0.6% to 2,900 points.

Qatar: The index fell 1% to 10,398 points.

– Egypt: The index rose 0.9% to 13,526 points.

– Bahrain: The index rose 0.1% to 1,550 points.

Oman: The index rose 0.4% to 3,777 points.

Kuwait: The index rose 0.1% to 6,754 points.