Major Gulf markets rise as easing recession fears lift risk-on mood

Bahraini traders are seen at Bahrain Bourse in Manama, Bahrain, November 4, 2020. REUTERS/Hamad I Mohammed

Jan 24 (Reuters) - Major stock markets in the Gulf opened higher on Tuesday, as easing recession fears and expectations of a less-aggressive rate hike from the U.S. Federal Reserve improved risk appetite.

The U.S. Fed will end its tightening cycle after a 25-basis-point hike at each of its next two policy meetings and then likely hold interest rates steady for at least the rest of the year, according to most economists in a Reuters poll.

Most Gulf currencies are pegged to the U.S. dollar, while Qatar, Saudi Arabia and the United Arab Emirates usually mirror any monetary policy change in the world's largest economy.

Dubai's main share index (.DFMGI) gained 0.3%, strengthened by banking stocks as Islamic lender Dubai Islamic Bank (DISB.DU) rose 1.4%, while real estate heavyweight Emaar properties (EMAR.DU) added 0.5%.

Saudi Arabia's benchmark stock index (.TASI) edged 0.2% higher, supported by energy shares and financials, as oil behemoth and index heavyweight Saudi Aramco (2222.SE) and the world's largest Islamic lender Al Rajhi Bank (1120.SE) gained 0.5% each.

Crude price - a key catalyst for Gulf's financial markets - drifted lower on Tuesday, easing from last week's gains on expectations of fuel demand recovery in the world's top importer China.

The benchmark stock index (.QSI) in Qatar opened 0.2% higher, supported by petrochemical and banking shares, as petrochemical maker Industries Qatar (IQCD.QA) and Islamic lender Qatar Islamic Bank (QISB.QA) jumped 0.7% and 0.5%, respectively.

Among other stocks, Aamal Company (AHCS.QA) rose 4.6% after the firm's unit won a contract worth 1.2 billion Qatari riyals ($329.67 million) with Kahramaa.

Abu Dhabi's benchmark index (.FTFADGI) hiked 0.2%, on course to break a four-session losing streak, as real estate developer Aldar Properties (ALDAR.AD) jumped 1.3% and Adnoc's retail unit Adnoc Distribution (ADNOCDIST.AD) gained 0.9%.

Separately, overall growth in the six GCC economies was forecast to average 3.3% and 2.8% this year and next respectively, the Jan. 9-23 poll showed, down from 4.2% and 3.3% in the previous poll.

($1 = 3.6400 Qatar riyals)

Reporting by Mohd Edrees in Bengaluru; Editing by Sherry Jacob-Phillips

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