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Markets post mixed results ahead of Fed cut

Gulf markets posted mixed results on Tuesday ahead of expected rate cuts in the US, with Saudi’s main index breaking a shocking run of losses while markets in Dubai, Qatar and Oman continued their slump.

The US Federal Reserve is expected to cut interest rates by up to 100 basis points when it meets on Tuesday, following hot on the heels of Sunday's emergency 25-basis point cut in its discount rate - the rate at which it lends to banks.
The emergency measures send Gulf markets into a tailspin on Monday, with markets in Saudi Arabia and Bahrain both dropped more than 2%, while those in the UAE, Oman and Kuwait saw more than 1% wiped off their value.

Saudi’s main index recovered some of its earlier losses on Tuesday, posting its first gain after falling for five straight days.

Saudi Basic Industries Corporation (Sabic) and SABB Bank climbed 0.43% and 1.38% respectively, while Al Ahlia Bank and Yansab Petrochemical posted strong gains of 5.27% and 5.14% respectively.

The index finished the day up 0.91% at 9,540.73 points. However, it is still down more than 15% since the start of the year.

Kuwait continued its stellar streak, notching up its five positive close in six days.

The benchmark index gained 0.71% to finish the day at 14,235.50 points, helped along by National Bank of Kuwait and Ahli United Bank, which climbed 1% and 3.23% respectively.

Kuwait is the only Gulf state not to peg its currency to the embattled US dollar.

Bahrain too finished in positive territory for the day, with its main index ending 0.51% higher to close at 2,782.70 points.

In the UAE, where markets have seen a turbulent few days, Dubai's benchmark index finished up while Abu Dhabi's dropped again.

Dubai managed to recoup some of Monday’s losses. The index was pushed along by strong performances from Dubai Investments and Emirates NBD, which finished 2.78% and 1.08% higher respectively. Dubai’s index closed up 0.64% on 5,617.63 points.

Meanwhile, a drop in the value of shares in UAE telecom Etisalat, down 1.27%, and National Bank of Abu Dhabi (NBAD), down 0.88%, dragged the capital’s main index into the red.

The index followed up Monday’s loss of 1.72%, the largest single-day fall in over one a month, to close down 0.51% on 4,578.24 points.

Qatar continued its miserable streak, falling again for the third time in four days. Commercial Bank of Qatar and Qatar Islamic Bank led the way, losing 2.92% and 2.75% respectively.

The main index closed down 1.16%, ending the day on 10,090.07 points.

Markets also fell in Oman, led by National Bank of Oman and telecom Omantel, which shed 2.55% and 0.84% respectively. Muscat’s main index finished the day down 1.14% to close on 10,472.01 points.

Global markets began to steady in early trading on Tuesday, recouping some of the losses incurred as a result of the implosion of US investment bank Bear Stearns over the weekend and fears of a global economic slowdown.

The Dow Jones Industrial Average finished higher on Monday after the Fed’s weekend rate cut and most key Asian markets ended the day in the black.

The MSCI’s Asian Index, a broad measure of the market performance across key indexes in that region, rose more than 1% on Tuesday with strong performances out of Hong Kong and Japan’s Nikkei.

The two ended the day up 1.4% and 1.5% respectively, bringing some confidence to investors ahead of the Fed meeting.

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