The Fed will announce its decision on Wednesday, having already lifted its policy rate by 475 basis points since March last year into a 4.75%-5.00% range from near zero.
Most Gulf Cooperation Council countries, including Saudi
Arabia, the United Arab Emirates and Qatar, have their
currencies pegged to the U.S. dollar and follow the Fed's policy
moves closely, exposing the region to a direct impact from
monetary tightening in the world's largest economy.
Saudi Arabia's benchmark index extended the previous
session's losses, dropping 0.6%, with Al Rajhi Bank down 1.2% and oil giant Saudi Aramco off 1.7%.
The Saudi stock market broke its uptrend as investors booked
gains after the main index put in a strong performance in recent
weeks, said Ahmed Negm, Head of Market Research MENA at XS.com.
"Investors' reaction also comes as central bank meetings
draw closer with some uncertainty over interest rate decisions
and future guidance."
Abu Dhabi's index fell 0.4%, but Dubai's rose 1.1%, helped by a 2.3% jump in Emirates Central Cooling
Systems .
The Qatari benchmark closed 0.6% higher, with
Mesaieed Petrochemical Holding Company up 2.8%.
Outside the Gulf, Egypt's blue-chip index eased
0.1%.
According to Negm, the Egyptian market was volatile as local
investors joined their international counterparts in selling
stocks. The market could continue to see downward pressure as
investor sentiment could deteriorate further, he said.
SAUDI ARABIA fell 0.6% to 11,219 ABU DHABI lost 0.4% to 9,669 DUBAI added 1.1% to 3,576 QATAR gained 0.6% to 10,332 EGYPT lost 0.1% to 17,301 BAHRAIN was up 0.1% to 1,907 OMAN down 0.6% to 4,726 KUWAIT declined 1.1% to 7,793
(Reporting by Ateeq Shariff in Bengaluru; Editing by Kirsten Donovan)
