By Amna Mariyam
Major Gulf stock markets gave up early gains to close down on Monday, as investor optimism over a U.S. rate cut and higher oil prices gave way to concerns about excess crude supplies.
Saudi Arabia's benchmark index TADAWUL:TASI fell 0.9% to its lowest level in nearly two years, pressured by broad-based sectoral losses.
Al Rajhi Bank TADAWUL:1120, the world's largest Islamic lender, and oil giant Saudi Aramco TADAWUL:2222 both fell 0.9%. Elsewhere, Theeb Rent a Car TADAWUL:4261 dropped more than 2% as its shares traded ex-dividend.
Dubai's main share index DFM:DFMGI also retreated 0.9%, with nearly all sectors closing in negative territory. Emirates NBD DFM:EMIRATESNBD led the losses, falling almost 3%.
Emirates Integrated Telecommunications Company, better known as du, declined 3% after it launched a secondary share sale as one of its main investors, a Mubadala subsidiary, trims its holding. The transaction could generate about AED 3.39 billion ($923 million), with du receiving no proceeds from the sale.
Abu Dhabi's index ADX:FADGI edged down 0.7%.
Abu Dhabi Commercial Bank ADX:ADCB tumbled 7.5% - its steepest fall in more than three years - after the UAE's third-largest bank by assets proposed a rights issue priced 30% below the last close, aiming to raise 6.1 billion dirhams ($1.66 billion).
Qatar stock index QSE:GNRI declined 0.6%, hit by a 0.7% fall in Qatar Islamic Bank QSE:QIBK.
The U.S. Federal Reserve's expected rate cut next week - driven by weaker U.S. job growth and a rise in unemployment to a near four-year high of 4.3% - initially appeared supportive for sentiment.
However, investor optimism waned during the session as traders had already fully priced in a 25-basis point (bp) cut, with just an 8% chance of a larger 50-bp move, according to the CME FedWatch tool.
The Fed's stance carries heavy clout in the Gulf, where most currencies are pegged to the U.S. dollar, anchoring regional monetary policy.
Outside the Gulf, Egypt's blue-chip index EGX:EGX30 rebounded 0.4%, supported by a 1.9% gain in Commercial International Bank EGX:COMI.
SAUDI ARABIA
TADAWUL:TASI dipped 0.9% to 10,497
ABU DHABI
ADX:FADGI dropped 0.7% to 9,960
DUBAI
DFM:DFMGI fell 0.9% to 5,935
QATAR
QSE:GNRI eased 0.1% to 11,125
EGYPT
EGX:EGX30 advanced 0.4% to 34,602
BAHRAIN
BAHRAIN:BHBX added 0.1% to 1,938
OMAN
(.MSX30) slipped 0.9% to 5,078
KUWAIT
(.BKP) jumped 2% to 9,266