Most Gulf markets gain on Fed rate cut bets

Most Gulf stock markets rose on Monday, buoyed by expectations of additional Federal Reserve interest rate cuts in the coming year, though subdued oil prices tempered overall sentiment.

Investor focus will now shift to the minutes of the Fed’s most recent meeting, scheduled for release on Tuesday.

The U.S. central bank lowered rates earlier this month and signalled only one additional cut next year, though market participants are betting on at least two more. Monetary policy shifts in the United States have a significant impact on Gulf markets, where most currencies are pegged to the dollar.

Saudi Arabia’s benchmark index gained 0.7%, with Al Rajhi Bank up 0.9% and Saudi National Bank, the country’s biggest lender by assets, adding 1.4%.

Oil behemoth Saudi Aramco closed 0.8% higher.

The Qatari index added 0.3%, with Qatar National  Bank advancing 2%.

Oil prices rose by more than $1 as investors weighed talks between the U.S. and Ukrainian presidents on a possible deal to end the war in Ukraine against potential oil supply disruption in the Middle East.

While supply disruptions have helped oil prices rebound in recent sessions from a near five-year low on December 16, they are on track for their steepest annual decline since 2020.

Brent is down about 17% on the year, as rising crude output threatened the prospect of an oil glut heading into 2026. Lower prices and disruption to crude exports impact fiscal balances in countries reliant on oil income.

In Abu Dhabi, the stock index closed 0.3% higher.

Dubai’s main share index edged up 0.1%, with Dubai Electricity and Water Authority  rising 1.1%.

Bahrain’s bourse was left flat on the day.

Post trading hours, Bahrain announced that it has launched major fiscal reform measures that include raising fuel prices, electricity and water tariffs, and dividends from state-owned companies, a government statement said on Monday.

Outside the Gulf, Egypt’s blue-chip index was up 0.3%.