Debt Ceiling key factor impacting GCC market performance- Report

According to a new analysis by investor relations consulting firm Iridium Advisors, Qatar (-1.8%)  experienced selling pressure from both domestic and foreign institutions. Concerns about the US debt ceiling and fluctuating oil prices pulled Saudi Arabia (-1.4%) down. Oman (-1.2%) reversed its prior week’s gain, whilst Kuwait (-0.5%) had a mild setback but has not shown positive numbers for over a month. Weakness in banking stocks nudged Abu Dhabi (-0.3%) down, and Dubai (-0.1%) declined marginally.

Meanwhile, Bahrain (+1.0%) upheld its positive trajectory for the sixth week in a row.

In the US, the Dow Jones (-1.0%) slumped, affected by protracted US debt ceiling negotiations and future interest rate speculation after some hawkish commentary from US Federal Reserve officials. Contrarily, the S&P 500 (+0.3%) and Nasdaq Composite (+2.5%) made gains, fueled by renewed hope of a resolution to the US debt ceiling deadlock and Nvidia’s better-than-anticipated earnings. European markets suffered losses, with the CAC40 (-2.3%) leading the fall, trailed by the DAX (-1.8%), FTSE100 (-1.7%), and STOXX600 (-1.6%).

Read more: GCC markets mixed, US debt ceiling in focus: Report

Oil-fueled optimism?

Regional markets could commence the week on a more positive note as some media reports suggested on the weekend that US lawmakers are nearing an agreement on increasing the debt ceiling before the 1 June deadline. The gain in crude oil prices past week on expectations of tighter supplies from the US could also buoy markets, though caution may prevail ahead of the OPEC+ meeting on 4 June. On the corporate agenda, while Sohar International Bank will host an earnings call for its FY2022 results, Ma’aden and Muscat Gas will be hosting earnings calls to discuss 1Q 2023 earnings performance.

Global investors eyeing economic data

In the US, investors will keep an eye on economic data like consumer confidence, employment data, and construction spending. The Street expects job growth to decrease for the month of May, from 230K to 180K, while consumer confidence is also expected to decline. In the EU, the inflation data of some of the member countries will be of importance. Also, Christine Lagarde’s speech highlighting the recent economic data from the region will be keenly watched by investors. In the UK, it will be a quiet week with manufacturing PMI being on the watchlist.

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