Most Gulf markets gain as fears about rapid Fed hikes, bank crisis ease

Investors speak in front of a screen displaying stock information at the Abu Dhabi Securities Exchange
Investors speak in front of a screen displaying stock information at the Abu Dhabi Securities Exchange, United Arab Emirates June 25, 2014. REUTERS/Stringer

March 15 (Reuters) - Most stock markets in the Gulf rebounded in early trade on Wednesday as concerns of a banking crisis eased, while U.S. inflation data came in line with expectations, improving the odds of a smaller rate hike by the Federal Reserve next week.

The Federal Reserve is seen raising its benchmark rate a quarter of a percentage point next week and again in May.

Most Gulf currencies are pegged to the dollar, and Qatar, Saudi Arabia and the United Arab Emirates usually mirror any monetary policy change in the United States.

Saudi Arabia's benchmark index (.TASI) gained 0.3%, supported by a 1.7% rise in Dr Sulaiman Al-Habib Medical Services (4013.SE), while National Shipping Company Of Saudi Arabia (4030.SE) jumped more than 5%, a day after reporting a sharp rise in annual profits.

But the index's gains were limited by a 1.5% fall in oil giant Saudi Aramco (2222.SE) as the stock went ex-dividend.

Dubai's main share index (.DFMFI) advanced 1.1%, and is on course to end a six-day losing streak, buoyed by a 3.5% leap in sharia-compliant lender Dubai Islamic Bank (DISB.DU).

In Abu Dhabi, the index (.FTFADGI) added 0.3%.

Oil prices — a key catalyst for the Gulf's financial markets — rebounded more than 1%, after the previous day's fall, as OPEC's upwards revision for Chinese consumption offset bearish global investor sentiment triggered by U.S. bank failures.

The Qatari benchmark (.QSI), however, traded 0.2% lower, dragged down by a 5.8% slide in utility firm Qatar Electricity and Water Co (QEWC.QA) as the stock went ex-dividend.

Reporting by Ateeq Shariff in Bengaluru; Editing by Shilpi Majumdar

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