Gulf Stock Markets Mixed Amid Weak Oil Prices and US Economic Data

On Monday, the stock markets in the Gulf region displayed a mixed performance, primarily influenced by weak oil prices and the anticipation of upcoming economic data from the United States. Investors are closely watching the situation as comments from Federal Reserve officials are expected this week, which could further impact market sentiments.

In Qatar, the index experienced a slight decline of 0.2%. This drop was largely attributed to a 1.1% decrease in the shares of Qatar Gas Transport Nakilat and a 0.4% fall in the shares of Industries Qatar, a major petrochemical producer. Oil prices, which play a crucial role in the financial markets of the Gulf, fell due to disappointing news regarding China’s stimulus plan. Investors had hoped for a boost in fuel demand from China, the world’s second-largest oil consumer, but the news did not meet expectations. Additionally, the U.S. dollar's slight increase added to the pressure on oil prices.

Looking ahead, there are concerns regarding the potential rise in U.S. oil and gas production under the new Trump administration. However, analysts believe that the production forecast for 2025 is unlikely to change significantly. In Saudi Arabia, the benchmark index managed to recover from early losses, ultimately finishing flat. Meanwhile, the Abu Dhabi index saw a minor decline of 0.1%.

This week is particularly important for traders, as several Federal Reserve officials, including Chair Jerome Powell, are scheduled to speak. Key economic indicators, such as the U.S. consumer and producer price index data, weekly jobless claims, and retail sales figures, are also set to be released. According to the CME Fedwatch tool, traders currently see a 65% chance of another 25-basis-point rate cut by the Fed in December, while there is a 35% chance that rates will remain unchanged. The monetary policy decisions of the six-member Gulf Cooperation Council (GCC) are typically influenced by the Fed's actions, given that most regional currencies are pegged to the U.S. dollar.

In Dubai, the main share index rose by 0.3%, buoyed by a 1.3% increase in the shares of blue-chip developer Emaar Properties, which is preparing to announce its earnings. In a separate development, Talabat, the Middle Eastern arm of Delivery Hero, is set to list on the Dubai Stock Exchange in mid-December, offering 15% of its issued shares, as announced by its German parent company.

Outside the Gulf region, Egypt’s blue-chip index saw a gain of 0.7%, with Telecom Egypt's shares jumping by 6.7%. This surge followed the company signing several service agreements with Vodafone Egypt for infrastructure services.

The mixed performance of Gulf bourses reflects the ongoing uncertainties in the global oil market and the anticipation of significant economic data from the U.S. Investors are advised to stay informed and consider the potential implications of these developments on their investment strategies. As the markets continue to react to both local and international factors, a cautious approach may be prudent in navigating this complex financial landscape.