GCC equity markets continue upward trajectory amid positive outlook for crude oil prices

Global markets eye economic data, Fed speeches 
GCC equity markets continue upward trajectory amid positive outlook for crude oil prices
Equity markets

GCC equity markets closed in the green last week, according to a new analysis by investor relations consulting firm Iridium Advisors. Dubai (+2.4 percent) clocked its third weekly gain, partly driven by Emirates NBD and Emaar Properties, with the developer unveiling a new $20 billion lifestyle project. Kuwait (+2.1 percent) solidified its gains for the third week running.

The Saudi market (+1.0 percent) experienced a boost from the health and financial sectors. Abu Dhabi (+0.8 percent) finally snapped its six-week losing streak, while Oman (+0.5 percent) built on last week’s upward trajectory. Both Bahrain (+0.1 percent) and Qatar (+0.1 percent) registered marginal growth, with Qatar mainly lifted by gains in its banking stocks. On the international front, U.S. markets remained in an uptrend mainly driven by optimism that the Federal Reserve is nearing the end of its rate hike cycle although the central bank suggested some more interest rate increases later this year. The Nasdaq Composite (+3.2 percent) and S&P 500 (+2.6 percent) closed at their highest levels in more than a year, while the Dow Jones (+1.2 percent) reached a new six-month closing high. This optimism seeped into Europe, too, where the DAX (+2.6 percent), CAC40 (+2.4 percent), STOXX600 (+1.5 percent), and FTSE100 (+1.1 percent) all recouped their previous week’s losses.

Looking to keep the momentum going

The forthcoming trading week might see regional markets sustaining their upward trajectory as optimism over crude oil price recovery after a two-week decline continues to grow. This is largely attributed to potential demand improvements from Chinese refineries. Additionally, the supportive global market environment could bolster this positivity, despite lingering concerns about a potential global slowdown. Corporate developments to monitor include ACWA Power, Al Arabia, Bahri, KEIR, Sarco, and Zain KSA, all of whom are seeking shareholder approval for dividend distributions. On the M&A front, HSBC Oman and Sohar International Bank, along with Dhofar International Development and Oman Investment and Finance, are awaiting shareholder approvals for their prospective consolidation plans.

Central bank and economic data in the spotlight

In the U.S., the coming week promises a flurry of economic data and eagerly awaited speeches from the Fed. Investors will closely monitor key indicators like existing home sales and building permits. As the week progresses, flash PMI numbers will come into focus, especially with the anticipation of a contraction in manufacturing. In Europe, flash PMI numbers are on the release docket too. Moreover, the ECB is expected to increase the interest rate by 25 basis points. Over in the U.K., inflation figures are set to release, and should the CPI data underperform expectations, the BOE is anticipated to counter with a substantial 50 basis point interest rate hike.

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