May 4 (Reuters) - Most major stock markets in the Gulf
were subdued in early trade on Thursday, tracking global shares
lower on the U.S. Federal Reserve rate hike and signs of stress
at another regional bank in the world's largest economy.
The Fed raised interest rates by a quarter of a percentage
point and signalled it may pause further increases, giving
officials time to assess the fallout from the recent bank
failures, the political standoff over the U.S. debt ceiling, and
monitor inflation.
At a press conference, Fed Chair Jerome Powell said
inflation remains the chief concern, and that it is therefore
too soon to say with certainty that the rate-hike cycle is over.
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 benchmark index dropped 0.3%, with
petrochemical maker Saudi Basic Industries Corp falling as much as 1.9% after reporting a sharp decline in
first-quarter net profit.
Among other losers, Saudi British Bank retreated
more than 3% as the lender traded ex-dividend.
Separately, government-led reforms and the growth of private
investment in new sectors will help support non-oil economic
growth in Saudi Arabia amid an expected sharp slowdown in
overall growth this year, a senior IMF official said.
Dubai's main share index fell 0.1%, with blue-chip
developer Emaar Properties losing 0.7%.
In Abu Dhabi, the index eased 0.1%.
Oil prices - a key catalyst for the Gulf's financial markets
- rose but were unable to claw back the over 9% decline during
the previous three days as demand concerns in major consumers
overrode signals that the U.S. may pause its interest rate
increases.
The Qatari benchmark , however, bucked the trend to
trade 1% higher, buoyed by a 4.4% jump in telecoms firm Ooredoo after it reported a rise in first-quarter net profit.
(Reporting by Ateeq Shariff in Bengaluru; editing by Eileen
Soreng)
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