Gulf Markets Continue Gains as US Recession Concerns Ease

Early Wednesday trading saw most Gulf stock markets rise, continuing their recovery from the significant sell-off experienced earlier in the week due to fears of a potential U.S. recession.

On Monday, U.S. Federal Reserve policymakers countered concerns that the weaker-than-expected July jobs data signaled an economic freefall into recession.

According to the CME FedWatch tool, there is now a 65% probability that the Fed will cut interest rates by 50 basis points in September, down from 85% the previous day.

Monetary policy in the six-member Gulf Cooperation Council (GCC) typically follows the Fed’s decisions, as most regional currencies are pegged to the U.S. dollar.

Saudi Arabia’s benchmark index increased by 0.8%, with oil giant Saudi Aramco rising by 1.7%.

Aramco announced it would acquire a 22.5% stake in the petrochemical joint venture Petro Rabigh from Japan’s Sumitomo Chemical for $702 million, aiming to turn around the loss-making venture.

Aramco also reported a second-quarter net profit of 109.01 billion riyals ($29.04 billion) on Monday, surpassing the company-provided median estimate of $27.7 billion from 15 analysts.

Dubai’s main share index climbed 2%, driven by a 4.2% surge in blue-chip developer Emaar Properties.

Dubai’s main airport is on track to handle a record number of passengers this year, following an 8% year-on-year increase in the first six months, according to Dubai Airports.

In Abu Dhabi, the index gained 1.4%.

Conversely, the Qatari benchmark index declined by 0.2%, impacted by a 0.1% drop in Qatar National Bank, the Gulf’s largest lender.