DUBAI: Most stock markets in the Gulf fell on Sunday with fears about sharp US interest rate hikes and the prospect of weaker oil demand weighing on sentiment.

Crude prices, a key catalyst for the Gulf’s financial markets, posted a second weekly decline on Friday amid fears that rising COVID-19 cases in top oil importer China may squeeze demand.

Meanwhile, Gulf Cooperation Council countries are in the firing line of Federal Reserve policy moves as five have their currencies pegged solely to the dollar and broadly follow the US monetary policy moves.

Saudi Arabia’s benchmark index fell 0.8%, pressured by banking stocks, with Al Rajhi Bank down 1.2% and Saudi National Bank dropping 1.7%.

The Qatari index also dropped 0.8%, extending losses to five sessions in a row, with financials and industrial stocks leading the losses.

Qatari conglomerate Industries Qatar lost 1.6% while Qatar Islamic Bank was down 1.2%.

Outside the Gulf, Egypt’s blue-chip index edged up 0.1% for a sixth session of gains, with Elsewedy Electric.