Gulf Stock Markets Experience Early Decline
Most major stock markets in the Gulf region saw a downturn in early trading on Wednesday due to escalating geopolitical tensions.
Geopolitical Tensions Rise
On Tuesday, Israel announced the death of Hashem Safieddine, the successor to the late Hezbollah leader Hassan Nasrallah, who was killed last month in an Israeli operation targeting the Iran-backed militant group.
Saudi Arabia's Market Reaction
In Saudi Arabia, the benchmark index dropped by 0.4%, primarily influenced by a 0.5% decline in Al Taiseer Group, an aluminum products manufacturer, and a 0.6% fall in Al Rajhi Bank. Banque Saudi Fransi also retreated by 1% following a reported decline in its quarterly net profit.
The International Monetary Fund (IMF) has further reduced its GDP growth forecast for Saudi Arabia for 2024 to 1.5%, with expectations of a rebound to 4.6% in 2025, according to its latest World Economic Outlook report released on Tuesday.
Market Trends in Other Gulf Nations
In Abu Dhabi, the index fell 0.2%, while the Qatari index decreased by 0.3%, with Qatar National Bank, the Gulf's largest lender, also experiencing a 0.3% drop. Conversely, Dubai's main share index increased by 0.3%, buoyed by a 1.4% rise in Salik Company, a toll operator.
Traders are adjusting their expectations regarding the Federal Reserve's monetary policy, leading to a cautious sentiment in the markets. The Gulf Cooperation Council's monetary policy generally aligns with the Fed's decisions, as most regional currencies are pegged to the U.S. dollar.


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