Most major stock markets in the Gulf experienced slight gains on Monday, largely influenced by rising oil prices. However, these gains were somewhat restrained as China, the world’s second-largest economy, implemented a smaller-than-expected cut to lending rates.
Oil prices, which significantly impact the Gulf region’s economy, saw an increase due to tightening global supply resulting from reduced exports from major producers like Saudi Arabia and Russia. This boost in oil prices helped offset concerns about global demand growth, particularly in light of high-interest rates.
In Saudi Arabia, the benchmark index recorded a 0.2% increase, marking its fourth consecutive session of gains. Key performers included Banque Saudi Fransi, which rose by 1.7%, and Al Rajhi Bank, with a 0.4% increase.
In separate news, Japan is reportedly making preparations for a meeting of foreign ministers from Japan and the Gulf Cooperation Council (GCC) member states, scheduled to take place in Saudi Arabia in early September. This meeting aims to strengthen diplomatic ties between the countries.
Abu Dhabi’s stock index also showed a modest gain of 0.1%, while Dubai’s main share index edged up by 0.1%, partly supported by a 0.6% increase in the leading lender, Emirates NBD.
On the other hand, the Qatari benchmark experienced a 0.4% drop, with most of the stocks in the index in negative territory. Notable among these was Islamic lender Masraf A Rayan, which saw a decline of 1.6%.
China’s central bank made a surprising move by reducing its one-year lending rate by 10 basis points while leaving its five-year rate unchanged. This decision deviated from analyst expectations, which had anticipated cuts of 15 basis points for both rates.