Dec 6 (Reuters) - Qatar's main index led a drop in most stock markets in the Gulf, while the Saudi index fell to its lowest since May last year on worries over the fallout of aggressive U.S. interest rate hike following the latest economic data.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) declined 1.4%, the biggest fall since Nov. 21, as strong services sector data suggested the U.S. central bank might hike interest rates for longer.
Most Gulf Cooperation Council countries have their currencies pegged to the dollar and generally follow the Fed's policy moves, exposing the region to a direct impact from any monetary tightening by the Fed.
Saudi Arabia's benchmark index (.TASI) dropped 1.3%, trading at its lowest since May 2021, dragged down by a 1% fall in Al Rajhi Bank (1120.SE) and a 0.7% decrease in Retal Urban Development Co (4322.SE).
Shares of United Cooperative Assurance were down 0.9%.
In Abu Dhabi, the index (.FTFADGI) eased 0.2%.
However, the index found some support from rising oil prices.
Oil - a key catalyst for the Gulf's financial market - rebounded after plunging more than 3% in the previous session, as the implementation of sanctions on Russian sea-borne crude oil eased concerns about oversupply, while easing China's COVID curbs bolstered the demand outlook.
Separately, the United Arab Emirates and Ukraine agreed on Monday to begin talks on a bilateral trade deal, expected to conclude by the middle of next year, the UAE's economy ministry said.
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