Most stock markets in the Gulf ended higher on Wednesday on optimism that the U.S. Federal Reserve will start cutting interest rates early next year, although geopolitical tensions limited gains.
The rate cut expectations were boosted by U.S. data released on Friday that showed that by some key measures inflation was now at or below the central bank's 2% target.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Federal Reserve's decisions, as most regional currencies are pegged to the dollar.
Saudi Arabia's benchmark index (.TASI) added 0.1%, helped by a 6.3% jump in Etihad Atheeb Telecommunication (7040.SE).
Dubai's main share index (.DFMGI) added 0.2%, with blue-chip developer Emaar Properties (EMAR.DU) rising 1.3%.
The Dubai bourse recorded limited price developments and continued to move sideways during the last few days. The market could continue to stagnate for the remaining trading sessions of the year, Ahmed Negm, Head of Market Research MENA at XS.com.
"However, it could benefit from the improving sentiment on a global scale."
In Qatar, the index (.QSI) advanced 0.6%, rising for a ninth session, led by a 1.5% gain in the Gulf's biggest lender Qatar National Bank (QNBK.QA).
The Abu Dhabi index (.FTFADGI) finished 0.1% higher.
Israel's war against Hamas will last for months, Israel's military chief said on Tuesday, while the United Nations voiced alarm over an escalation of Israeli attacks that killed more than 100 Palestinians over two days in part of the Gaza Strip.
Outside the Gulf, Egypt's blue-chip index (.EGX30) climbed 1.5%, with most of its constituents gaining, including tobacco monopoly Eastern Company (EAST.CA), which was up 3.7%.
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