Mideast Stocks: Most Gulf markets gain on rising oil prices, Fed rate pause optimism

Mideast Stocks: Most Gulf markets gain on rising oil prices, Fed rate pause optimism

Most stock markets in the Gulf rose in early trade on Monday on optimism the U.S. Federal Reserve would pause its rate hikes this month, while rising oil prices cheered investors.

Currencies in most Gulf Cooperation Council countries, including Saudi Arabia, are pegged to the dollar and central banks generally follow the Fed's policy moves, meaning the region feels a direct impact from monetary tightening in the United States.

Saudi Arabia's benchmark index advanced 1%, buoyed by a 2.2% rise in oil giant Saudi Aramco.

Oil prices - a key catalyst for the Gulf's financial markets - were up $1 a barrel after top global exporter Saudi Arabia pledged to cut production by another one million barrels per day from July, counteracting the macroeconomic headwinds that have depressed markets. Dubai's main share index added 0.2%, with Emirates Central Cooling Systems Corp rising 1.7%.

Meanwhile, new business activity, driven largely by domestic demand, continued to support non-oil business activity in the United Arab Emirates in May, a survey showed, although the pace of growth eased from the previous month.

In Abu Dhabi, the index bucked the trend to trade 0.2% lower.

The Qatari benchmark added 0.1%.

Analysts have said Saudi Arabia's latest production cuts are likely to push the price of Brent crude towards $100 a barrel by the end of the year.