Most Gulf bourses gain on rising Fed rate cut bets

Most stock markets in the Gulf closed higher on Tuesday after dovish remarks from U.S. Federal Reserve officials firmed interest rate-cut bets, though weak oil prices weighed on the Saudi bourse.

Minneapolis Fed President Neel Kashkari said on Monday that inflation is gradually easing but warned that the unemployment rate could “pop” higher – an outcome that would make rate cuts more likely.

Markets are currently pricing in at least two cuts this year, with investors now awaiting Friday’s nonfarm payrolls report for fresh clues about the Fed’s next moves.

CME’s FedWatch tool showed traders tilted toward easing.

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

Dubai’s main share index advanced 0.9%, with blue-chip developer Emaar Properties rising 2.1%.

Abu Dhabi’s index gained 0.5%.

The United Arab Emirates’ non-oil private sector maintained robust growth in December, although the pace of expansion moderated slightly from a month ago, a survey showed on Tuesday.

The Qatari index added 0.2%, led by the Gulf’s biggest lender, the Qatar National Bank, which rose 1.3%.

Saudi Arabia’s benchmark index slipped 0.3%, hit by a 0.8% fall in Al Rajhi Bank.

While the outlook for the non-oil economy remains robust, supported by the potential for further monetary policy easing this year, a bearish crude outlook continues to dampen market sentiment, said Daniel Takieddine, co-founder and CEO of Sky Links Capital Group.

Crude prices, meanwhile, edged slightly higher on Tuesday as the market weighed expectations of ample global supply this year against uncertainty around Venezuelan crude output following the U.S. capture of President Nicolas Maduro.

Outside the Gulf, Egypt’s blue-chip index rose 2.1%, with Commercial International Bank closing 2% higher.

Egypt’s non-oil private sector grew for a second consecutive month in December, though the pace of expansion slowed, according to a business survey released Tuesday.