Most stock markets in the Gulf closed higher on Monday as investors were focused on the outlook for interest rates ahead of this week’s U.S. Federal Reserve policy meeting, overlooking the potential impact of the Israel-Gaza war.

The Federal Reserve meeting, which concludes on Wednesday, is likely to dominate a busy week that has U.S. employment data and earnings from tech heavyweight like Apple Inc on its calendar.

The Fed is widely expected to keep interest rates unchanged, possibly setting the course for stocks and bonds the rest for the year.

The Bank of England and the Bank of Japan will also announce policy decisions in the coming days.

Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by Fed decisions as most regional currencies are pegged to the U.S. dollar.

Most Gulf markets retreat on Mideast woes, interest rate fears

Saudi Arabia’s benchmark index gained 0.5%, with digital solutions provider Elm Company advancing 2.3%, a day after reporting a sharp rise in quarterly profit.

The Saudi stock market extended its rebound, thanks to company earnings, said Hani Abuagla, senior market analyst at XTB MENA.

“However, it could come under pressure as caution could dominate ahead of the Federal Reserve meeting.”

The Qatari benchmark finished 1.7% higher, rebounding from its lowest in over three years, with all but one stock closing in positive territory, including Commercial Bank, which jumped 4.5%. Telecoms firm Ooredoo leapt 4.7%.

Dubai’s main share index climbed 1.4%, with toll operator Salik surging 5.6%.

In Abu Dhabi, the index added 0.5%.

Israeli troops and tanks attacked Gaza’s main northern city from the east and west on Monday, three days after it began ground operations in the Palestinian enclave that have increased international pressure for civilians to be protected.

Outside the Gulf, Egypt’s blue-chip index closed 1.5% higher, led by an 11.6% surge in tobacco monopoly Eastern Company.

========================================= SAUDI ARABIA     rose 0.5% to 10,536 ABU DHABI        up 0.5% to 9,285 DUBAI            gained 1.4% to 3,839 QATAR            climbed 1.7% to 9,519 EGYPT            up 1.5% to 23,436 BAHRAIN          eased 0.4% to 1,931 OMAN             lost 0.2% to 4,543 KUWAIT           advanced 2.1% to 7,047=========================================