Mideast Stocks: Major Gulf Markets Rise on US Rate Cut Hopes

Major stock markets in the Gulf inched higher in early trade on Monday helped by growing expectations of U.S. Federal Reserve interest rate cuts after Chair Jerome Powell's dovish remarks last week.

Powell on Friday signalled a possible rate cut at the Fed's meeting next month, saying that risks to the job market were rising but inflation remained a threat, and that a decision wasn't set in stone.

Markets are now pricing in an 87% chance of a quarter-point rate cut in the September policy meeting, and a cumulative reduction of 48 basis points by this year-end, according to CME FedWatch Tool.

The Fed's stance holds significant implications for Gulf economies, where most currencies are pegged to the U.S. dollar, making it an anchor for regional monetary stability.

Saudi Arabia's benchmark index added 0.1%, supported by a 0.1% gain in Al Rajhi Bank and a 1.3% increase in Banque Saudi Fransi.

Dubai's main share index edged 0.1% higher, with blue-chip developer Emaar Properties rising 1.4%.

In Abu Dhabi, the index was up 0.2%.

Oil prices - a catalyst for the Gulf's financial markets - rose after Ukraine stepped up attacks on Russia, fanning concerns Russian oil supply could be disrupted, while expectations for a cut in U.S. interest rates buoyed the outlook for global growth and fuel demand.

The Qatari index gained 0.2%, with the Gulf's biggest lender Qatar National Bank climbing 0.9%.