Most stock markets in the Gulf ended higher on Wednesday as investors assessed the prospects of a pivot in policy tightening by major central banks in early 2023 especially after the latest U.S. data showed a slowdown in inflation.

The U.S. consumer price index increased 0.1% last month, 0.2 percentage points slower than economists expected. In the 12 months through November, headline CPI climbed 7.1% - its slowest pace in about a year.

All eyes are now on the U.S. Federal Reserve’s policy decision due later in the day. While a 50-basis-point hike to a range of 4.25% to 4.5% is almost fully priced in, investors will be looking for clues on the future pace of hikes as well as commentary on the economy.

Most Gulf currencies are pegged to the dollar and Qatar, Saudi Arabia and the United Arab Emirates usually mirror any monetary policy change in the United States.

Saudi Arabia’s benchmark index added 0.3%, extending gains from the previous session from when it rebounded from a 20-month low, led by a 4.9% jump in shares of Dr Sulaiman Al-Habib Medical Services.

In Abu Dhabi, the index edged 0.1% higher, snapping a seven-day losing streak, with the country’s biggest lender First Abu Dhabi Bank gaining 1.3%.

Most Gulf markets retreat ahead of Fed meeting; Saudi rebounds

The Abu Dhabi bourse saw a rebound due to improved oil prices and a potentially softer monetary policy in the United States, said Fadi Reyad, chief market analyst at CAPEX.com MENA.

“The shift could help support investors’ confidence and a better outlook for the market.”

Dubai’s main share index rose 0.3%, led by a 2% gain in top lender Emirates NBD.

The Qatari index, however, bucked the trend to close 0.9% lower amid volatile natural gas prices.

Qatar - the Gulf Arab state hosting the soccer World Cup - posted a budget surplus of 30 billion riyals ($8.19 billion) for the third quarter of 2022, boosted by rocketing oil and gas revenue, the state news agency said on Tuesday, citing data from the finance ministry.

Outside the Gulf, Egypt’s blue-chip index advanced 1.5%, buoyed by a 4.4% rise in Commercial International Bank Egypt.

======================================== SAUDI ARABIA    gained 0.3% to 10,248 ABU DHABI       up 0.1% to 10,056 DUBAI           firmed 0.3% to 3,300 QATAR           dropped 0.9% to 11,080 EGYPT           rose 1.5% to 15,378 BAHRAIN         was up 0.1% to 1,854 OMAN            lost 0.7% to 4,866 KUWAIT          added 0.1% to 8,228========================================