Geopolitical Strife and Fed Policy Uncertainties Impact Gulf Stock Markets
In a tumultuous day for the Middle East, stock markets in the Gulf remained subdued on Sunday amidst escalating geopolitical tensions and uncertainties surrounding U.S. Federal Reserve policy. The region was rocked by Iran’s first direct attack on Israel, where more than 300 missiles and drones were launched in retaliation for an alleged strike on Iran’s embassy compound in Damascus.
Iran’s Supreme Leader Ali Khamenei praised the country’s armed forces for their bold move, emphasizing Iran’s power and resolve in the face of adversity. This attack further heightened tensions in the region, with implications for global markets and economies.
Amidst this turmoil, financial experts are closely monitoring the impact on the economy, with concerns about inflation and interest rates. Chicago Federal Reserve President Austan Goolsbee highlighted the challenges of bringing down inflation, signaling a shift in focus from earlier predictions of interest rate cuts.
In the Gulf region, Saudi Arabia’s benchmark index saw a slight increase, driven by gains in ACWA Power. However, the International Monetary Fund’s revised growth forecast for the Middle East and North Africa region paints a challenging picture, citing various factors including conflicts, lower oil output, and high debt levels.
Qatar’s market experienced a decline, with industries like petrochemical maker Industries Qatar and Qatar Islamic Bank facing losses. On the other hand, Egypt’s blue-chip index rebounded after recent losses, led by Commercial International Bank.
The Central Bank of Egypt also reported a significant improvement in its net foreign assets deficit, signaling positive developments in the country’s economy. Despite the uncertainties and challenges, markets across the Middle East continue to navigate through a complex landscape, with implications for investors and policymakers alike.
As the situation unfolds, stakeholders are closely monitoring developments and preparing for potential shifts in the economic and geopolitical landscape. Stay tuned for more updates on this evolving story.
(Reporting by Ateeq Shariff in Bengaluru; Editing by David Holmes)
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