Upward Momentum in Key Gulf Markets Precedes Earnings Season

In the early trading hours of Monday, several major stock markets in the Gulf exhibited upward movement, anticipating the impending release of quarterly and full-year corporate results. Despite the looming regional conflict casting a shadow on sentiment, positive trends were observed.

Saudi Arabia's benchmark index showcased a 0.5% gain, poised to break a five-day losing streak. This surge was primarily fueled by a 3% increase in Elm Co and a 1.1% rise in the auto rental firm Lumi. Government data released on Monday revealed that the kingdom's annual inflation rate had eased to 1.5% in December, down from 1.7% the previous month. This decline was attributed to housing rent increases.

It's noteworthy that Saudi Arabia experienced relatively low inflation last year compared to global levels, with government policies effectively mitigating the impact of international price hikes.

The Qatari index reflected a 0.3% increase, notably boosted by the 1.8% rise in sharia-compliant lender Masraf Al Rayan.

Meanwhile, Dubai's main share index inched 0.1% higher, driven by a 1.2% gain in toll operator Salik. Conversely, the Abu Dhabi index dipped 0.1%, influenced by a 0.8% decline in conglomerate International Holding.

Against the backdrop of these market movements, oil prices saw an uptick as traders remained vigilant about potential supply disruptions in the Middle East. This concern stems from recent strikes by US and British forces aimed at preventing Houthi militia in Yemen from attacking ships in the Red Sea.

On Sunday, the Houthi militia issued a strong response threat following another overnight strike by the United States. The US later reported intercepting a missile fired from Houthi militant areas of Yemen aimed at one of its ships.