Gains on Saudi Stock Exchange, Dubai Retreats in Anticipation of U.S. Debt-Limit Negotiations
The Saudi Stock Exchange rose on Tuesday as traders kept a close eye on the ongoing debt-limit talks in the United States. The benchmark index gained 0.6%, despite lower oil prices, which have weighed heavily on markets across the region. Meanwhile, Dubai’s stock exchange fell and was set to extend losses for a fourth consecutive session due to concerns over U.S.-led negotiations regarding raising America’s borrowing limit before an August 2 deadline when it is expected that government operations will grind to a halt unless Congress passes legislation allowing for more borrowing authority from global investors and creditors.
Analysts suggest that while some positive signs are emerging from Washington about progress toward reaching an agreement, uncertainty remains high given recent developments, such as Republican House Speaker John Boehner’s announcement of his plan separate from President Obama’s proposal last week; this has caused some concern among investors who fear further delays or even deadlock in negotiations could cause significant disruption not only domestically but also internationally if no deal is reached by August 2nd. With many Middle Eastern bourses still feeling the effects of regional unrest following uprisings earlier this year, any potential market volatility resulting from unresolved US debt issues could be particularly damaging at present.Read more at Reuters