Most Gulf shares join worldwide fall
Most stock markets in the Gulf tracked global equities lower on Thursday after the U.S. Federal Reserve signaled a slower pace of rate cuts in the coming year.
Barring Kuwait, all central banks of the Gulf Cooperation Council cut key interest rates on Wednesday, following the Federal Reserve’s decision to reduce U.S. rates by a quarter of a percentage point.
The Fed cut interest rates as expected, but Powell’s explicit references to the need for caution from here on sent markets into a tailspin.
Saudi Arabia’s benchmark stock index slipped 0.6 percent, pressured by losses in most sectors. Al Rajhi Bank fell 1.6 percent and Almarai Company lost 2.1 percent.
Saudi Arabia’s largest dairy producer, Almrai, said its board had approved a full-year cash dividend of 1 riyal per share, the same as the previous year.
China shares rise
China stocks rose on Friday, as signs of fresh Sino-US tensions in technology fuelled bets on shares of local chip makers, while banks rose after benchmark lending rates were left unchanged.
Hong Kong shares also edged up, but casino stocks fell after Chinese President Xi Jinping urged Macau to show “courage” to change and innovate, potentially reducing the city’s reliance on gambling.
China’s blue-chip index CSI300 rose 0.3 percent by the midday break, while the Shanghai Composite index gained 0.5 percent. Hong Kong’s stock benchmark Hang Seng was up 0.1 percent.
China’s policy-triggered bull run that started in late September has lost steam, but trading remains active, especially among smaller stocks. Outstanding margin trading – a barometer of leveraged bets – hovered near a nine-year high of 1.87 trillion yuan ($256.21 billion).
Japan’s Nikkei set for weekly fall
Japan’s Nikkei share average on Friday was headed for its worst week since early November despite the tailwind of a weaker yen, as weakness on Wall Street and caution ahead of major central bank policy decisions weighed.
The Nikkei rose 0.2 percent to 38,889.95 at the midday recess, but was set to end the week about 1.5 percent lower.
The broader Topix added 0.11 percent and was still headed for a weekly drop of about 1.2 percent, the index’s worst weekly performance since mid-October.
Japanese stocks drew little support from the Bank of Japan’s (BOJ) decision to not hike interest rates on Thursday or from BOJ Governor Kazuo Ueda’s subsequent news conference, where he said considerable time was required to judge the outlook for domestic wages and overseas economies, chiefly the US This came after the US Federal Reserve signalled a more cautious pace of rate cuts in 2025, after trimming rates by an as-expected quarter point on Wednesday.
Australian stocks extend losses
Australian shares extended losses for the second straight session, dragged down by commodity stocks, a day after the Federal Reserve signalled fewer interest rate cuts for next year.
The S&P/ASX 200 index was down 1.1 percent at 8080.9 by 0025 GMT.
The benchmark was on track to record its worst week since mid-April, having lost 2.4 percent so far. The benchmark fell 1.7 percent on Thursday.
The US Federal Reserve cut interest rates by 25 basis points as expected on Wednesday, while revising its forecast for 2025, cutting the number of projected rate reductions to two from the four anticipated in September.
Indian stocks set for muted open
Indian shares are set for a muted open on Friday after the previous session’s declines on concerns over a slower pace of rate cuts by the US Federal Reserve, while IT stocks are likely to find support after solid results by US peer Accenture.
The GIFT Nifty futures were trading at 23,917 as of 07:57 a.m. IST, indicating the benchmark Nifty 50 will open near Thursday’s close of 23,951.70.
In the previous session, the Nifty and BSE Sensex closed 1 percent lower, taking their weekly declines to over 3 percent, after the Fed delivered a 25 basis points rate cut but forecast just two reductions in 2025, half of what policymakers anticipated in September.
The benchmark indexes are set to log their first weekly decline in five. Fed’s rate cut outlook dampened risk appetite for local equities, with foreign investors selling Indian shares worth 42.25 billion rupees ($496.5 million) on Thursday, exchange data showed.
Asian stocks pinned near three-month lows
Asian shares were pinned near three-month lows on Friday as investors awaited key U.S. inflation data that could either ease or worsen concerns about price pressures, while the dollar towered at two-year peaks.
The closely watched inflation gauge – the U.S. Core Personal Consumption Expenditures – is due later in the day.
Forecasts are centred on a monthly rise of 0.2 percent for November, and any upward surprises there could lead markets to further scale back bets for U.S. policy easing next year.
Futures imply just 37 basis points of rate cuts from the Federal Reserve in 2025, less than two cuts, after the U.S. central bank turned hawkish at its last meeting of the year.
A rate cut is not fully priced in until June.
Rates now are expected to bottom out at 3.9 percent by the end of next year, much higher than just a few months ago.
Sri Lanka shares close higher
Sri Lankan shares rose for the 18th consecutive session on Thursday, aided by materials and energy sectors.
The CSE All-Share index settled 0.27 percent higher at 14,654.26.
The index has climbed about 14 percent in the last eighteen sessions.
Industrial Asphalts (Ceylon) and Autodrome were the top gainers by percentage on the index, up 25 percent each.
Trading volume on the index rose to 357 million shares from 209.6 million shares in the previous session.