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Most major Gulf bourses decline as sentiment sours due to COVID-19 in China

Dec 29 (Reuters) – Most major Gulf stock markets declined in early trade on Thursday as rising COVID cases in China unsettled investors and raised doubts over the prospect of a rapid recovery for the world’s second-largest economy.

Chinese hospitals and funeral homes were under extreme pressure on Wednesday as rising infections drained resources, while doubts over the scale of the outbreak and official figures prompted some countries to impose new travel rules on Chinese visitors.

Dubai’s main share index (.DFMGI) dropped 0.4%, hit hard by a 0.9% drop in Shariah-compliant lender Dubai Islamic Bank (DISB.DU).

In Abu Dhabi, the index (.FTFADGI) shed 0.2%, with the United Arab Emirates’ biggest lender First Abu Dhabi Bank (FAB.AD) shedding 0.6%.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.78% as news from China unsettled investors.

Most stocks are in negative territory, including petrochemical maker Industries Qatar (IQCD.QA), with the Qatari index (.QSI) retreating 0.7%, which was down 1.4%.

Oil prices – a key driver for Gulf financial markets – dipped amid hopes of a recovery in fuel demand from China, the world’s biggest crude importer.

Oil markets were also influenced by expectations of another hike in US interest rates as the Federal Reserve tries to limit price increases in a tight labor market.

Saudi Arabia’s benchmark index (.TASI), however, extended gains for a second session to trade 0.4% higher, helped by a 1.4% rise in the kingdom’s biggest lender Saudi National Bank (1180.SE). increased the trend of

(Reporting by Ateeq Sharif in Bengaluru) Editing by Tomasz Janowski

Our Standards: The Thomson Reuters Trust Principles.

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