(Reuters) – Most major stock markets in the Gulf eased in early trade on Wednesday amid rising geopolitical tensions in the region.
Israel on Tuesday confirmed it had killed Hashem Safieddine, the heir apparent to late Hezbollah leader Hassan Nasrallah who was killed last month in an Israeli attack targeting the Iran-backed Lebanese militant group.
Saudi Arabia’s benchmark index dropped 0.4%, hit by a 0.5% fall in aluminium products manufacturer Al Taiseer Group and a 0.6% decrease in Al Rajhi Bank.
Among other fallers, Banque Saudi Fransi retreated 1%, following a decline in quarterly net profit.
The International Monetary Fund further lowered its GDP growth forecast for Saudi Arabia for 2024 to 1.5% and estimated growth to accelerate to 4.6% next year in its latest World Economic Outlook Report released on Tuesday.
In Abu Dhabi, the index fell 0.2%.
Shifting expectations around how fast and deep the Federal Reserve will cut rates have also hurt risk sentiment, with traders now anticipating the U.S. central bank to be measured in its easing.
Monetary policy in the Gulf Cooperation Council, which includes the UAE, often aligns with the Fed’s decisions as most of the regional currencies are pegged to the U.S. dollar.
The Qatari index dropped 0.3%, with the Gulf’s biggest lender Qatar National Bank, falling 0.3%.
Dubai’s main share index gained 0.3%, with toll operator Salik Company rising 1.4%.