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Gulf Markets Close Mixed as Saudi Shares Slip on Budget Deficit Concerns
Investors weigh fiscal pressures in the Kingdom while other regional indices post modest gains
Stock markets across the Gulf ended the latest trading session on a mixed note, with Saudi Arabia’s benchmark index declining as investors reacted to fresh fiscal data showing a widening quarterly budget deficit.
The downturn in Riyadh contrasted with more resilient performances in several neighboring markets, where selective buying in banking and energy stocks helped offset broader regional caution.
Saudi Arabia’s Tadawul All Share Index retreated amid investor concern that softer oil revenues and sustained government spending could weigh on near-term fiscal balances.
The Kingdom recently reported its largest quarterly budget shortfall since 2020, reflecting lower hydrocarbon income and continued outlays tied to long-term development initiatives under Vision 2030. Market participants said the data prompted some profit-taking in heavyweight sectors, particularly financials and petrochemicals.
Despite the decline, analysts noted that Saudi Arabia maintains strong sovereign fundamentals, including manageable public debt levels and substantial financial reserves.
Government strategy continues to prioritize economic diversification, infrastructure expansion and private-sector growth, policies that investors broadly view as supportive over the medium to long term.
Energy prices remain a key variable for sentiment, as global crude benchmarks fluctuate in response to supply dynamics and geopolitical developments.
Elsewhere in the Gulf, major indices in the United Arab Emirates closed higher, supported by gains in real estate and banking shares.
Qatar’s market also advanced modestly, buoyed by selective institutional buying, while Kuwait’s index traded within a narrow range.
Regional investors are closely monitoring global monetary policy signals and commodity trends, which continue to shape capital flows into emerging markets.
Market strategists said that while fiscal headlines weighed on sentiment in Saudi Arabia during the session, broader structural reforms and ongoing investment momentum provide underlying support for the Kingdom’s capital markets.
Trading volumes across the region were moderate as participants balanced short-term caution with longer-term confidence in Gulf economic resilience.
The downturn in Riyadh contrasted with more resilient performances in several neighboring markets, where selective buying in banking and energy stocks helped offset broader regional caution.
Saudi Arabia’s Tadawul All Share Index retreated amid investor concern that softer oil revenues and sustained government spending could weigh on near-term fiscal balances.
The Kingdom recently reported its largest quarterly budget shortfall since 2020, reflecting lower hydrocarbon income and continued outlays tied to long-term development initiatives under Vision 2030. Market participants said the data prompted some profit-taking in heavyweight sectors, particularly financials and petrochemicals.
Despite the decline, analysts noted that Saudi Arabia maintains strong sovereign fundamentals, including manageable public debt levels and substantial financial reserves.
Government strategy continues to prioritize economic diversification, infrastructure expansion and private-sector growth, policies that investors broadly view as supportive over the medium to long term.
Energy prices remain a key variable for sentiment, as global crude benchmarks fluctuate in response to supply dynamics and geopolitical developments.
Elsewhere in the Gulf, major indices in the United Arab Emirates closed higher, supported by gains in real estate and banking shares.
Qatar’s market also advanced modestly, buoyed by selective institutional buying, while Kuwait’s index traded within a narrow range.
Regional investors are closely monitoring global monetary policy signals and commodity trends, which continue to shape capital flows into emerging markets.
Market strategists said that while fiscal headlines weighed on sentiment in Saudi Arabia during the session, broader structural reforms and ongoing investment momentum provide underlying support for the Kingdom’s capital markets.
Trading volumes across the region were moderate as participants balanced short-term caution with longer-term confidence in Gulf economic resilience.
