May 3 (Reuters) - Major stock markets in the Gulf were
mixed in early trade on Wednesday, ahead of an expected U.S.
interest rate hike later in the day, while the Qatari index
advanced on broad-based gains.
In their efforts to tame elevated inflation levels, the U.S.
Federal Reserve is expected to hike rates by an additional 25
basis points on Wednesday, while the European Central Bank is
also expected to raise rates at its regular policy meeting on
Thursday.
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 dropped 0.8%, dragged
down by a 4% slide in Alinma Bank as the lender missed
market expectations for the first-quarter.
Among other losers, oil giant Saudi Aramco retreated 1.1%.
Oil - a key catalyst for the Gulf's financial markets -
extended losses after plunging 5% in the previous session.
Dubai's main share index was flat.
In Abu Dhabi, the index edged 0.1% higher.
An acceleration in the growth of new orders led to a surge
in non-oil business activity in the United Arab Emirates in
April, a business survey showed on Wednesday.
The UAE, the second-biggest economy among GCC members, will
grow 3.7% in 2023 and 4.0% next year, significantly lower than
7.6% last year, according to the latest Reuters poll of 16
economists.
The Qatari benchmark advanced 1.4%, as all the stocks
on the index were in positive territory including telecoms firm
Ooredoo jumping 4.5%.
(Reporting by Ateeq Shariff in Bengaluru; editing by Uttaresh
Venkateshwaran)
