Most stock markets in the Middle East ended lower on Wednesday as the killing of Hamas leader Ismail Haniyeh in Iran fuelled tensions in the region, with investors also focused on a U.S. interest rate decision by the Federal Reserve.
Haniyeh was assassinated in the early hours of the morning in Iran, Hamas said on Wednesday, stoking fears of further escalation in a region shaken by Israel’s war in Gaza and a worsening conflict in Lebanon.
The assassination, which came less than 24 hours after Israel claimed to have killed the Hezbollah commander it said was behind a deadly strike in the Israeli-occupied Golan Heights, appeared to set back chances of any imminent ceasefire agreement in Gaza.
Dubai’s main share index dropped 0.4%, with blue-chip developer Emaar Properties falling 4.8%.
In Abu Dhabi, the index retreated 0.6%.
The United Arab Emirates stock markets were affected by the geopolitical tensions, said Mazen Salhab, Chief Market Strategist MENA, at BDSwiss.
Most Gulf markets in black on Fed rate-cut optimism
“Investors are looking forward to more earnings releases, which could support further gains, especially in the Dubai market if Emaar reports higher-than-expected results.”
Saudi Arabia’s benchmark index reversed early losses to close 0.4% higher, helped by a 0.7% rise in Al Rajhi Bank.
The Fed is expected to leave rates unchanged, but also to indicate that a reduction in borrowing costs could come as soon as September. It has kept its policy rate in the 5.25%-5.50% range for the past year.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed’s decisions as most regional currencies are pegged to the U.S. dollar.
The Qatari benchmark finished flat.
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