Stock markets across the Gulf region ended the day with gains, disregarding the news about Trump's tariffs
In the face of recent US tariff threats, Gulf stock markets have demonstrated a remarkable level of resilience. This response suggests that investors are not overly alarmed by the latest trade policies announced by US President Donald Trump, which include tariffs on various products and countries, including some BRICS nations.
## Impact on Gulf Stock Markets
The UAE witnessed a significant surge in its stock market, with Dubai's main index rising 0.7%, reaching a 17-year high. This growth was primarily driven by gains in companies like Emirates Central Cooling Systems Corp. The Abu Dhabi index also increased 0.4%, marking its sixth consecutive day of gains.
Saudi Arabia's benchmark index, however, eased 0.1%, influenced by a 3.1% decline in ACWA Power and a 0.9% decrease in Saudi Aramco. Qatar's benchmark index closed flat, indicating minimal impact from the tariff announcements.
## Impact on BRICS Countries
While the UAE is not officially part of BRICS, it is noteworthy for its growing connections with BRICS nations. Saudi Arabia has not joined BRICS but is monitoring developments. The US plans to impose tariffs on imports from BRICS countries, which includes Brazil, India, and others. The tariffs could alter trade dynamics and affect global supply chains, potentially influencing sectors tied to international commerce, although Gulf markets remain relatively insulated for now.
## Impact on Individual Stocks
The impact of the tariff announcements was evident in the performance of individual stocks. ACWA Power's stock price fell 3.1%, impacting the overall performance of the Saudi benchmark index. Similarly, Saudi Aramco's stock decreased by 0.9%, contributing to the slight decline in the Saudi index.
## Continued Tensions and International Trade Dynamics
While Gulf markets have shown resilience so far, continued tensions could lead to further market fluctuations and affect international trade dynamics. For instance, Trump announced renewed tariffs on semiconductors and pharmaceuticals on Wednesday. Egypt's blue-chip index finished 0.4% higher after trading following a session's break on Wednesday.
The UAE continues to grow as a regional hub for crypto firms, with several crypto payments now enabled for real estate, tuition, and transport. Emirates has signed a preliminary agreement with Crypto.com to accept payments through its platform, further cementing the UAE's position in the burgeoning crypto sector.
In Egypt, the stock exchange suspended trading on Tuesday due to ongoing disruptions affecting brokerage firms' ability to communicate efficiently. However, trading resumed on Wednesday, with Egypt's benchmark index closing flat. Abu Dhabi National Insurance Co advanced 6.4% following regulatory approval to open a branch in India.
In conclusion, while the US tariff threats have caused initial volatility, Gulf markets have demonstrated robustness, partly due to their diversified economies and strategic positions in global trade. However, continued tensions could lead to further market fluctuations and affect international trade dynamics.
- The UAE's stock market index has experienced a significant rise, reaching a 17-year high, aided by gains in companies like Emirates Central Cooling Systems Corp.
- Although ACWA Power and Saudi Aramco's stocks performed poorly, contributing to a slight decline in Saudi Arabia's benchmark index, Qatar's benchmark index showed minimal impact from tariff announcements.
- The US plans to impose tariffs on imports from BRICS countries, which could alter trade dynamics and affect global supply chains, potentially influencing sectors tied to international commerce.
- The performance of individual stocks, such as ACWA Power and Saudi Aramco, illustrates the impact of tariff announcements on their respective indexes.
- In addition to traditional finance, the UAE is growing as a regional hub for crypto firms, with Emirates signing a preliminary agreement with Crypto.com to accept payments through its platform, further cementing its position in the burgeoning crypto sector.
