Riyadh – Mubasher: Saudi stock market Tadawul won’t be negatively influenced by the recent hike of interest rates by the US Federal Reserve, said Abdullah El-Gably, technical analyst.
The US Federal Reserve increased rates as expected on Wednesday by a quarter of a point, only the second time it has done so since 2008.
“The financial markets were well prepared to absorb the rate hike decisions since the Federal Reserve has unveiled its intention to raise the interest rate four months earlier,” added ELGably in exclusive statement to Mubasher.
“The Saudi market is currently witnessing a correction movement where the main index may move below the level of 7,000 points,” noted the analyst. The banking sector is sole major beneficiary of the rate hike, so it may contribute in controlling the current correction movement, he added.
“The rate hike decision could have non preferable impacts on the banking sector, as investors may start to abstain from applying for loans, “said ELGably.
Fed chair Janet Yellen also pointed out to the prospect of three more hikes in US interest rates in 2017.
