Global equity markets closed in negative territory during the week on the back of worsening bilateral relations between the US and China, coupled with concerns of slowing pace of economic recovery post the rise in US initial jobless claims for the first time since March 2020.
On a positive note, EU leaders agreed on a landmark stimulus package to support member states minimize the economic downturn. Oil prices rose by 0.46% during the week on the back of continued optimism but the upside was capped by concerns of rising COVID-19 cases and escalating US-China tensions, which could negatively impact demand.
For the MENA region, equity markets recorded mixed performance during the week as investors continue to believe that the pace of economic recovery might be slower than earlier estimates as indicated from the weak Q2 2020 earnings. For the week, 3 out of the 7 regional indexes closed in green while 2 closed in red and 2 (Saudi Arabia and Dubai) remained unchanged. Oman was the best performing index regionally with gains of 3.29%, followed by 0.18% in Egypt; while Kuwait recorded losses of 1.69%, followed by 1.37% in Bahrain, and 0.31% in Abu Dhabi.
Going forward, global equities are likely to remain volatile with a negative bias as rising number of new cases could potentially impact the pace of economic recovery. Additionally, the concerns surrounding the worsening bilateral relations between the US and China will continue to weigh on investor sentiments in the coming weeks. For the regional markets, investors will continue to remain cautious amid a challenging business environment and fears of a potential second wave of infections impacting the pace of recovery going forward.
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