Most Gulf bourses edge up on energy relief, fading Fed hike odds

Most Gulf markets closed higher on Monday as easing energy disruption fears and tempered expectations of an immediate Federal Reserve rate hike bolstered sentiment, while the Middle East war continued to simmer.

Cooling US jobs data and sharp downward payroll revisions slashed the odds of a Fed rate hike this month from 64% to under 20%, according to the CME FedWatch tool, though traders still anticipate a December move.

Gulf markets tend to track shifts in US monetary policy expectations as most regional currencies are pegged to the dollar.

Middle East crude exports surpassed levels seen before the start of the US-Iran war on four days in late September, shipping data showed on Monday, defying continued vessel attacks in the Strait of Hormuz. Release of oil stocks by the Group of Seven nations further boosted supplies.

Dubai’s main share index added 0.1%, with utility firm Dubai Electricity and Water Authority advancing 3.8%.

In Abu Dhabi, the index was up 0.4%.

The UAE’s non-oil private sector saw strong growth in September, supported by firmer demand, which strengthened pricing power of businesses and led to the steepest increase in selling prices in more than 15 years, according to a survey released on Monday.

The Qatari index advanced 1.1%, led by a 1.2% increase in the Gulf’s biggest lender Qatar National Bank .

Milad Azar, market analyst at XTB MENA, said most GCC equity markets remained resilient despite ongoing geopolitical uncertainty and stalled US-Iran negotiations.

He added that continued shipping disruptions in the Strait of Hormuz are still weighing on investor sentiment, as markets await tangible diplomatic progress to ease tensions. Nevertheless, strong domestic fundamentals continue to support regional markets.

Bucking the trend, Saudi Arabia’s benchmark index fell 0.3%, hit by a 1.5% slide in Al Rajhi Bank.

On Sunday, Yemen’s Saudi-backed, internationally recognised government launched a major military campaign to take back all territory held by the Houthis.

The Houthis said they fired ballistic missiles and drones at oil major Saudi Aramco’s sites in Riyadh and Khurais, and claimed the strikes set off major fires. They called the attacks retaliation for what they said were 50 Saudi-led coalition air and missile strikes on Yemen in the past 12 hours.

Aramco shares finished 0.6% higher.

Outside the Gulf, Egypt’s blue-chip index dropped 0.7%, with Commercial International Bank losing 0.7%.

Egypt’s non-oil private sector contracted more sharply in September, with output and new orders hit hard by inflation and geopolitical turmoil, a business survey showed on Monday.