Gulf Markets Under Pressure Due to Trade War Risks

Most major Gulf stock markets showed fluctuating or declining performance in early trading on Monday, following US President Donald Trump's threat to impose more tariffs, including on steel and aluminum, which could lead to inflationary pressures and limit opportunities for interest rate cuts.

Trump announced plans to impose 25% tariffs on all steel and aluminum imports into the United States, to take effect immediately, with additional reciprocal tariffs to be revealed on Tuesday or Wednesday.

In a retaliatory move, German Chancellor Olaf Scholz stated that the European Union is ready to respond within an hour if the US imposes tariffs on European goods.

Meanwhile, China is preparing to impose retaliatory tariffs on certain US exports starting Monday, with no signs of progress in easing ongoing trade tensions.

• Saudi Market: The main index (.TASI) fell by 0.1%, impacted by a 2% drop in shares of the National Commercial Bank (1180.SE).

• Al Yamama Steel Industries (1304.SE) dropped by 5.3%, making it the largest loser on the Saudi index. The Abu Dhabi Index (.FTFADGI) remained stable with no significant change.

• Qatar Market: The index (.QSI) rose by 0.1%, supported by a 0.4% increase in Qatar National Bank (QNBK.QA) shares.

• On the other hand, United Development Company (UDCD.QA) fell by 1.3% after reporting a sharp decline in revenues for 2024. Dubai's Main Index (.DFMGI) rose by 0.6%, driven by a 2.6% rise in Emirates NBD (ENBD.DU) shares.

• Global Concerns: Market volatility is expected to continue until clearer trade policies emerge, with reactions from global markets crucial for investment sentiment in the Gulf region.

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