Mideast Stocks: Most Gulf Markets Climb on Hopes of Further US Rate Cuts

Most major stock markets in the Gulf climbed in early trade on Monday, supported by investor optimism that the U.S. Federal Reserve will cut its interest rates further this year.

The U.S. Commerce Department said on Friday its Personal Consumption Expenditures Price Index (PCE) rose 0.3% in August, versus a 0.2% increase in July, matching the estimate of economists polled by Reuters.

Traders are currently pricing in a 90% chance of a Fed rate cut in October, with around a 65% probability of another easing in December, according to the CME FedWatch Tool.

Monetary policy shifts in the U.S. have a significant impact on Gulf markets, where most currencies are pegged to the dollar.

Saudi Arabia's benchmark index gained 1%, on course to snap two sessions of losses, led by a 1.4% rise in Al Rajhi Bank and a 1.8% increase in oil giant Saudi Aramco .

The Saudi bourse soared 5.1% on Wednesday, marking its largest single-day gain in more than five years, driven by broad-based strength following a Bloomberg News report that regulators may relax the 49% foreign ownership cap on listed companies, a move anticipated to attract significant new foreign investment to the region's leading equity market.

Dubai's main share index gained 0.4%, with sharia-compliant lender Dubai Islamic Bank advancing 1.3% and Emirates Central Cooling Systems Corp rising 2.3%.

In Abu Dhabi, the index added 0.1%.

The Qatari index, however, eased 0.1%, hit by a 0.7% fall in Qatar Islamic Bank.