Mideast stocks-Most Gulf markets fall on Fed hawkishness

Mideast stocks-Most Gulf markets fall on Fed hawkishness

Most stock markets in the Gulf dropped in early trade on Thursday after Federal Reserve Chair Jerome Powell said the central bank would deliver more rate increases next year.

Fed's hawkish stance risks tipping the economy into a recession, but Powell said a higher cost would be paid if the U.S. central bank does not get a firmer grip on inflation.

Most Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the U.S. dollar and follow the Fed's policy moves closely, exposing the region to a direct impact from monetary tightening in the world's largest economy.

Saudi Arabia's benchmark index fell as much as 0.6%, and was on course to fall after two sessions of gains.

Fed raised its benchmark overnight interest rate by half a percentage point and projected it would continue rising to above 5% in 2023, a level not seen since a steep economic downturn in 2007.

The Saudi Central Bank said on Wednesday it increased its key interest rates by 50 basis points, following Fed's move as the Saudi riyal is pegged to the dollar.

Retal Urban Development Co, however, advanced 2.4% after it signed agreements with Roshn Real Estate to develop villas.

Dubai's