Oil rally fuels stock markets in GCC: Markaz

Muscat: The S&P GCC Index accelerated its positive rally in the month of April, posting returns of 4.4 per cent as compared to 2.3 per cent in March. As a result, year to date gains increased to 13.5 per cent, according to a new report.
At the market level, almost all of the Gulf Cooperation Council (GCC) countries posted a positive return for the month except for Oman, which lost 1.0 per cent in April. Saudi Arabia’s Tadawul index topped the leader board with 5.5 per cent gain. Dubai, Abu Dhabi and Qatar’s General index gained by 5.0 per cent, 3.6 per cent and 2.7 per cent respectively in April, Kuwait Financial Centre (Markaz, recently said it its Monthly Markets Review report.
The positive momentum of Kuwait stock market continued with returns of 2.2 per cent registered in the month of April. Kuwait All Share index registered monthly gains for the fourth consecutive month in 2019. Among the blue chips, Kuwait Financial House (KFH) was the top performer for the month, gaining 3.9% followed by National Bank of Kuwait with monthly gain of 3.8 per cent. KFH achieved net profit of US$201.5 million for 2019 first quarter, a growth of 19.4 per cent compared to 2018 first quarter due to strong growth in core business.
Global equities continued to offer positive returns in April, as evident from MSCI World index that increased by 3.4 per cent during the month. The global economic growth concerns eased off as progress on the US-China trade deal lifted stocks higher. The most recent data from China is also encouraging as industrial output and retail sales increased in March.
China’s gross domestic product (GDP) growth was better than expected at 6.4 per cent in 2019 first quarter. The US S&P 500 index saw gains of 3.9 per cent in April. US economic growth accelerated in 2019 first quarter by 3.2 per cent as opposed to the expected 2.5 per cent.
Growth was driven by increasing exports and a narrowing trade deficit. US employment growth also accelerated in April, recovering from 17-month low seen in March. After raising interest rates four times in 2018, the US fed is now dovish on interest rates with some analysts expecting a possible cut by the end of 2019. Stronger than expected growth in corporate earnings also added to the positive momentum.
Oil markets have continued the rally for the fourth straight month in 2019 as Brent crude prices rose by 6.4 per cent to US$72.8 per barrel at the end of April. The oil price year to date gains now stand at 35.3 per cent. Oil prices touched US$74.57 per cent during the month, which was the highest in six months. It however remains much lower compared to 2018 high of US$84.16 per cent. Extension of production cut agreement by Organisation of Petroleum Exporting Countries (Opec) and Russia and a sharp decline in output by Venezuela due to blackouts in March ensured continuity in oil price rally.