By Ateeq Shariff
Most stock markets in the Gulf ended higher on Tuesday after data showed a smaller than expected rise in core U.S. inflation and talks between Washington and major trading partners continued.
U.S. President Donald Trump signalled he was open to discussions on tariffs after his weekend threat to impose 30% duties on imports from the European Union and Mexico from August 1.
U.S. consumer prices picked up in June, likely marking the start of a long-anticipated tariff-induced increase in inflation that has kept the Federal Reserve cautious about resuming its interest rate cuts. However, the increase was in line with expectations and the core reading rose less than forecast.
The Fed's actions have a significant impact on the Gulf region's monetary policy, as most regional currencies are pegged to the U.S. dollar.
Dubai's main share index DFM:DFMGI advanced 1%, buoyed by a 5.2% surge in top lender Emirates NBD DFM:EMIRATESNBD and a 1.8% increase in blue-chip developer Emaar Properties DFM:EMAAR.
In Abu Dhabi, the index ADX:FADGI gained 0.7%, with Abu Dhabi Commercial Bank ADX:ADCB jumping 7.6%, its biggest intraday rise since April 2020.
The lender posted second-quarter net profit of 2.32 billion dirham ($631.65 million), exceeding analysts' consensus estimate, according to data compiled by LSEG.
The upbeat results boosted sentiment across the banking sector, with both Abu Dhabi and Dubai benefiting from renewed investor confidence in financials, said George Pavel, general manager at Naga.com Middle East.
"Dubai's market also drew strength from its real estate sector, adding to the positive momentum," he added.
The Qatari index QSE:GNRI closed up 0.5%, led by a 1.7% increase in the Gulf's biggest lender Qatar National Bank QSE:QNBK.
Saudi Arabia's benchmark index TADAWUL:TASI declined 1.1%, hit by a 1.3% fall in Al Rajhi Bank TADAWUL:1120.
Elsewhere, oil giant Saudi Aramco TADAWUL:2222 fell 1.1%.
Oil prices - a catalyst for the Gulf's financial markets - were little changed after Trump's lengthy 50-day deadline for Russia to end its Ukraine war and avoid sanctions eased immediate supply concerns.
Outside the Gulf, Egypt's blue-chip index EGX:EGX30 gained 0.6%.
SAUDI ARABIA
TADAWUL:TASI dropped 1.1% to 11,095
Abu Dhabi
ADX:FADGI rose 0.9% to 10,151
Dubai
DFM:DFMGI gained 1% to 5,914
QATAR
QSE:GNRI added 0.5% to 10,770
EGYPT
EGX:EGX30 was up 0.6% to 33,935
BAHRAIN
BAHRAIN:BHBX edged 0.1% up to 1,953
OMAN
(.MSX30) dropped 0.3% to 4,613
KUWAIT
(.BKP) declined 0.3% to 9,341