Saudi Stock Market Surges on US Inflation Report

Stock markets in the Gulf region experienced a positive trend on Sunday, with the Saudi index leading the gains. This surge was primarily influenced by a US inflation report that reinforced expectations of potential interest rate cuts by the Federal Reserve. The Saudi benchmark index bounced back by 1.1% after a recent decline to a five-month low. The rise was supported by strong performances in various sectors, especially in IT, utilities, and healthcare. Notable gains were observed in ACWA Power, up by 4.4%, and Saudi National Bank, the largest lender in the kingdom, which added 1.8%. However, Saudi Aramco faced a 1.9% decrease, hitting its lowest level in over a year at 28.45 riyals per share. Despite this, Saudi Arabia initiated the sale of approximately 1.545 billion Aramco shares, priced between 26.7 to 29 riyals, attracting significant demand within hours of the launch.

In Qatar, the benchmark index also saw a rise for the second consecutive session, increasing by 0.7%. This growth was supported by the energy, finance, and real estate sectors. Notable performers included Qatar Fuel Co, up by 7.7%, and Qatar Gas Transport, which climbed 4.8%. The US inflation data released on Friday, meeting market expectations for April, fueled optimism for potential interest rate adjustments by the Federal Reserve. Given that most Gulf currencies are pegged to the dollar, changes in US monetary policy typically influence countries like Saudi Arabia, the United Arab Emirates, and Qatar.

Turning our focus outside the Gulf region, Egypt's blue-chip index closed lower for the fifth consecutive session, declining by 0.2% with most sectors in negative territory. Notable decliners included Eastern Company, down by 5.8%, and Talaat Mostafa Group, which dropped 2.1%. However, Juhayna Food saw a 2.5% increase following a 41% rise in its first-quarter net profit.

The positive movement in the Gulf region's stock markets, driven by the US inflation report and expectations of Federal Reserve actions, showcases the interconnectedness of global financial markets. Investors are closely monitoring these developments, especially in Saudi Arabia and Qatar, as they navigate the potential impacts of US monetary policy on their economies. Meanwhile, Egypt's market challenges highlight the diverse landscape of investment opportunities across different regions.