Gulf bourses mixed on rate cut expectations, geopolitical tensions | Reuters

Gulf bourses mixed on rate cut expectations, geopolitical tensions | Reuters

Stock markets in the Gulf ended mixed on Thursday as the U.S. Federal Reserve signalling a possible start to interest rate cuts, while escalating tensions in the region weighed on investor sentiment.

The Federal Reserve committee's decision to hold rates at 5.25%-5.5% on Wednesday was no surprise, but it emphasised that rates would not be cut until it had more confidence that inflation was truly beaten.

At a press conference, Fed Chair Jerome Powell flatly stated a cut as early as March seemed unlikely, but also conceded that everyone on the committee was looking to ease this year.

Most Gulf Cooperation Council countries, including the United Arab Emirates (UAE), peg their currencies to the U.S. dollar and follow the Fed's policy moves closely.

Saudi Arabia's benchmark index (.TASI) gained 1%, snapping a three-day losing streak, with Al Rajhi Bank (1120.SE) advancing 2.4% and the country's biggest lender Saudi National Bank (1180.SE) closing 1.4% higher.

Elsewhere, oil giant Saudi Aramco (2222.SE) rose 1.3%.

Brent crude futures were up 68 cents at $81.23 a barrel by 1140 GMT.

The Qatari benchmark (.QSI) dropped 0.4%, hit by a 1% fall in Qatar Islamic Bank (QISB.QA) and a 2.1% decrease in Islamic lender Masraf Al Rayan (MARK.QA).

In the Middle East, worries over attacks by Yemen-based Houthi forces on shipping in the Red Sea are driving up costs and disrupting global oil trading. The Houthi group also said it would keep up attacks on U.S. and British warships in what it called acts of self defence.

In Abu Dhabi, the index (.FTFADGI) finished 0.4% lower, hit by a 3.7% slide in the UAE's biggest lender First Abu Dhabi Bank (FAB) (FAB.AD) despite a sharp rise in quarterly earnings.

FAB said net profit surged 63% to 4.01 billion dirhams ($1.09 billion) for the quarter ended Dec. 31, beating analysts' average estimate of 3.6 billion dirhams.

Dubai's main share index (.DFMGI) advanced 1.2%, with blue-chip developer Emaar Properties (EMAR.DU) rising 1.5%.

Outside the Gulf, Egypt's blue-chip index (.EGX30) added 0.5%.

The International Monetary Fund said on Wednesday it was making progress in talks with Egypt on how to resume disbursements of a $3 billion loan, after a sharp slide in the currency on the black market increased the urgency for an agreement.