Most stock markets in the Gulf ended higher on Thursday amid rising oil prices but the gains were limited after a surprise interest rate hike by Bank of Canada brought back fears that U.S. rates could stay higher for longer.

The U.S. Federal Reserve’s next rate-setting meeting is on June 13-14 and investors are wary it may maintain its hawkish stance.

Oil - which fuels the Gulf’s economy - rose as tighter supply resulting from Saudi Arabia’s pledged production cut and a potential pause to U.S. interest rate hikes offset worries over demand weakness and a global economic slowdown.

Saudi Arabia’s benchmark index gained 0.2%, with Al Rajhi Bank rising 0.4% and Banque Saudi Fransi advancing 2%.

The Saudi index posted its first weekly gain of 3.5% in four weeks.

Saudi Arabia’s economy grew by 3.8% year-on-year in the first quarter of 2023, the General Authority for Statistics said on Thursday, broadly in line with estimates released last month.

Most Gulf markets gain on Fed rate pause hope; oil, Chinese data weigh

Dubai’s main share index ended flat after rising for nine straight sessions.

The Dubai bourse was volatile after this month’s surge as investors moved to secure their gains, said Farah Mourad, senior market analyst of XTB MENA.

“As a result, the main index could record some price corrections over the short term before rebounding, in particular if economic conditions remain strong locally.”

In Abu Dhabi, the index fell 0.3%.

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

Outside the Gulf, Egypt’s blue-chip index climbed 1%, as most of the stocks on the index were in positive territory including Commercial International Bank, which was up 1%.

========================================= SAUDI ARABIA     rose 0.2% to 11,397 ABU DHABI        fell 0.3% to 9,352 DUBAI            ended flat at 3,688 QATAR            dropped 0.4% to 10,257 EGYPT            gained 1% to 17,521 BAHRAIN          was up 0.1% to 1,954 OMAN             rose 0.2% to 4,659 KUWAIT           added 0.2% to 7,605=========================================