The GCC stock markets could see diverging developments this week as markets are likely to react differently to the strength of the oil market and the materializing global economic slowdown. Some price corrections were observed last week and could continue in some markets while others could revert to the upside. In any case, strong local fundamentals and improving sanitary conditions should provide some support.
Investors will remain on guard regarding China’s Evergrande’s ability to cover its liabilities in the future as the company already missed a payment deadline last week. The Chinese government is expected to step up oversight as fear of negative impact on the rest of the economy remains a concern.
Federal Reserve’s Decision
While last week’s Federal Reserve’s decision to keep interest rates on hold and to keep asset purchasing tapering at bay has helped market sentiment, the bank has also lowered its economic growth forecasts. The same…