Mideast Stocks: Gulf Bourses Gain on Optimism Over Further US Rate Cuts

Gulf stock markets closed on positive trajectories on Sunday, propelled by heightened investor expectations surrounding potential additional reductions in U.S. interest rates.

Investors also reacted positively to Palestinian militant group Hamas' agreement to some of the terms in U.S. President Donald Trump's plan to end the war in Gaza, though U.S. Secretary of State Marco Rubio said the war in Gaza has "not yet" ended, describing the release of the hostages held by Hamas as a first phase.

The key U.S. non-farm payrolls report, originally slated for release on Friday, has been postponed, leaving investors to lean on alternative indicators that point to a cooling labor market and sustain expectations of an imminent rate cut.

Investors are pricing in a 97% probability of a 25-basis-point rate reduction in October and a 85% likelihood of another similar cut in December, according to CME Group's FedWatch tool.

The Fed's stance carries heavy clout in the Gulf, where most currencies are pegged to the U.S. dollar, anchoring regional monetary policy.

Saudi Arabia's benchmark index <.TASI> gained 0.3%, with Al Rajhi Bank <1120.SE> rising 0.5% and National Shipping Company of Saudi Arabia (Bahri) <4030.SE> jumping 5.7%.

Bahri on Wednesday entered into a purchase agreement with International Maritime Industries Company for the construction and delivery of six dry bulk carriers. The total contract value is estimated at approximately 762 million riyals ($203 million).

In Qatar, the index <.QSI> added 0.5%, with the Gulf's biggest lender Qatar National Bank <QNBK.QA> rising 1%.

Outside the Gulf, Egypt's blue-chip index <.EGX30> finished 0.8% higher, led by a 1.7% gain in Commercial International Bank <COMI.CA>.

($1 = 3.7492 riyals)

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