Most stock markets in the Gulf ended higher on Monday, extending gains as investors ramped up their bets for an imminent end to U.S. interest rate hikes.
A cooler reading of U.S. consumer inflation was enough to convince investors that the Federal Reserve could deliver the final rate hike of its monetary policy cycle this month.
Most Gulf Cooperation Council countries, including Qatar, Saudi Arabia and the UAE, have their currencies pegged to the U.S. dollar and generally follow the Fed's policy moves, exposing the region to a direct impact from any U.S. monetary policy move.
Saudi Arabia's benchmark index (.TASI) gained 0.6%, led by a 2.1% increase in Dr Sulaiman Al-Habib Medical Services (4013.SE) and a 5.3% jump in Saudi Awwal Bank (1060.SE).
However, the kingdom's crude oil exports in May fell to a 19-month low, data from the Joint Organizations Data Initiative (JODI) showed on Monday, as cheap Russian oil lured some big Asian buyers.
Dubai's main share index (.DFMGI) gained 0.2%, extending gains for a fifth session, with Emirates Central Cooling Systems (EMPOWER.DU) finishing 1.6% higher.
In Abu Dhbai, the index (.FTFADGI) inched 0.1% higher.
On the other hand, oil - a key catalyst for the Gulf's financial markets - dropped by more than 1% on Monday after weaker than expected Chinese economic growth fuelled concerns over demand in the world's second-biggest oil consumer while a partial restart of halted Libyan output also pressured prices.
The Qatari index (.QSI) gained 0.5%, driven by a 2.4% increase in Qatar Islamic Bank (QISB.QA), a day after reporting a rise in first-half net profit.
Outside the Gulf, Egypt's blue-chip index (.EGX30) closed 1% higher, with top lender Commercial International Bank (COMI.CA) gaining 1%.
The Egyptian stock market continued its rebound but could record another round of price corrections with trading volumes declining and global investors adding to the selling pressure, said Farah Mourad, Senior Market Analyst of XTB MENA.
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