Mideast Stocks: Major Gulf bourses drop on Fed’s hawkish tone

Mideast Stocks: Major Gulf bourses drop on Fed’s hawkish tone

Major Gulf bourses closed lower on Thursday as investors remained cautious after the U.S. Federal Reserve's minutes from latest meeting reinforced a hawkish tone, although the Egyptian index bucked the trend. Minutes from the latest Fed meeting on Wednesday showed that a majority of the policymakers agreed that the risks of high inflation warranted further rate hikes.

Most Gulf currencies are pegged to the U.S. dollar, while Saudi Arabia, the United Arab Emirates and Qatar usually mirror U.S. monetary policy changes.

The benchmark index in Saudi Arabia dropped 1.1%, dragged down by losses in most sectors. The world's largest Islamic bank by assets, Al Rajhi Bank , declined 2.6% and oil giant Aramco slid 1.9% after J.P. Morgan cut its share target price to 39 riyals from 40 riyals.

Shares of Saudi Kayan Petrochemical declined 1.9% after it reported full-year net loss of 1.24 bln riyals ($330.54 mln) compared with profit of 2.39 bln riyals a year ago.

Qatari Stock index dropped 1.8%, extending its losses to a third session. With steepest intraday decline since Jan. 17, the index witnessed losses in almost all sectors, led by financial and energy stocks. The gulf region's largest lender Qatar National Bank declined 2.1% and Qatar Islamic