Sharp Fluctuations in Gulf Markets

Gulf stock markets declined in early trading today, Monday, after the Federal Reserve Chairman opposed expectations of an imminent rate cut, although rising oil prices limited the losses. The main Saudi index fell by 0.2%, affected by a 1.3% drop in shares of Al Rajhi Bank and a 0.7% decline in shares of Alinma Bank. Conversely, shares of Saudi Aramco, the giant oil company, rose by 0.3%. Oil prices increased in Asian trading, rising by about 1% in early trading, supported by a decline in Russian exports and increasing concerns about oil supply interruptions due to Houthi attacks on ships in the Red Sea. The main Dubai index lost 0.2% as Emaar Properties shares fell by 0.1%. In Abu Dhabi, the index decreased by 0.1%. New York Federal Reserve Chairman John Williams stated on Friday that the central bank is still focused on reducing inflation to its 2% target, adding that "it is too early to discuss cutting interest rates at this stage." Most Gulf Cooperation Council countries' currencies, including Saudi Arabia, the UAE, and Qatar, are pegged to the dollar and closely track the Federal Reserve's policy moves, exposing the region to direct impacts from tightening monetary policy in the world's largest economy.