French government bond yields rose slightly on Tuesday, with investors taking profits following their biggest daily decline in 5 months, while rising oil prices limited demand again for government bonds.
French 10-year bond yields, known as OAT, increased by two basis points to 4.924 percent, after falling by about 11 basis points on Monday, in their largest daily decline since May, coinciding with a decline in bond prices, according to Reuters.
Official data issued on Tuesday showed that consumer morale in France, the second largest economy in the euro zone, fell to its lowest levels since 2013 in early October, when protests were escalating towards the worst civil unrest the country has witnessed in years.
Student union leaders in France pledged on Monday to continue the protests, despite the concessions made by President Emmanuel Macron's government regarding education.
Meanwhile, oil prices traded above $114 per barrel, up 0.5 percent, supported by growing fears that the war in the Middle East will not end soon. European natural gas prices also recorded their highest levels in 4 years, in light of the scarcity of supplies and low temperatures across the region.
In this context, the 10-year German bond yield, which is a benchmark for the broader bond market in the euro zone, stabilized at 3.354 percent. Two-year German bond yields also stabilized at 3.075 percent.
The European Central Bank is scheduled to announce its decision on interest rates on Thursday, amid widespread expectations to keep monetary policy unchanged. But financial markets are currently pricing in a near 90 percent chance of raising interest rates in December, with a full price in for a second hike by April.
Accordingly, investors will focus on any signals from ECB President Christine Lagarde on the extent to which these increases are likely to be implemented.
The main Saudi market, TASI, opened trading on Tuesday with an increase of 1.5 percent, bringing the index to 9,909 points, continuing its gains for the second day in a row, after a wave of decline that pushed it to its lowest levels since 2021.
“Red Sea” stock topped the list of stocks that rose the most, with gains amounting to 9.96 percent, reaching 17.45 riyals, followed by “Fish” stock, rising by 9.83 percent to 53.75 riyals.
“Shams” shares also rose by 8.32 percent to 10.42 riyals, and “Rasan” shares rose by 8.17 percent to 133.70 riyals, while “Tabuk Agricultural” shares rose by 7.58 percent to 33.50 riyals.
In the leading stocks, “Saudi Aramco” shares continued to rise by 0.55 percent to 25.74 riyals.
Most Gulf stock markets rose in early trading on Tuesday, with diplomatic moves led by Saudi Arabia, Turkey and Pakistan to contain the military escalation, following a meeting of officials from the three countries with Iranian officials in Tehran on Monday.
In the Saudi stock market, the general index rose by 0.5 percent, supported by the rise of Al Rajhi Bank shares by 0.6 percent.
In the UAE, the Dubai Financial Market index rose by 0.6 percent, supported by a rise in Emaar Properties shares by 1.8 percent.
In a related context, DIB Holding, which owns the Dubai Investments Real Estate Complex, is seeking to raise up to $543 million through an initial public offering, in a move that may represent the first listing in the Emirates this year.
The Abu Dhabi Securities Market index also rose by 0.3 percent, while the Qatari index recorded the largest gains in the Gulf, rising 1 percent, with the share of Qatar National Bank, the largest bank in the region, rising by 0.7 percent.
The performance of the markets came amid continuing regional tensions. On Tuesday, the Saudi-led coalition in Yemen announced the interception and destruction of ballistic missiles and drones launched by the Iran-backed Houthi militia towards two regions in Saudi Arabia.
The Tehran meeting was the first high-level contact between Iran and the three countries, which signed a joint defense agreement last August, since the outbreak of the war that began with American and Israeli strikes on Iran, before the escalation spread to Saudi Arabia and Yemen.
