Saudi Arabia's stock market closed higher on Sunday as investors turned their focus to U.S. Federal Reserve interest rate cuts, while Egypt's main index retreated amid rising tensions in Gaza.
U.S. producer prices increased slightly more than expected in June amid a rise in the cost of services, but that did not change expectations that the Federal Reserve could start cutting interest rates in September.
Markets have now priced in a quarter percentage-point cut in September compared with seeing just over a 50% chance of that a month ago.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed's decisions as most regional currencies are pegged to the U.S. dollar.
Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.8%, with Al Taiseer Group (4143.SE), opens new tab advancing 10%, and Al Rajhi Bank (1120.SE), opens new tab closing up 1.1%.
In Qatar, the index (.QSI), opens new tab eased 0.1%, hit by a 0.4% fall in Qatar Islamic Bank (QISB.QA), opens new tab.
Oil futures prices settled slightly lower on Friday as investors weighed weaker U.S. consumer sentiment against mounting hopes for a Federal Reserve rate cut in September.
Outside the Gulf, Egypt's blue-chip index (.EXG30), opens new tab dropped 0.9%, as most of its constituents were in negative territory including Talaat Mostafa Group (TMGH.CA), opens new tab, which was down 3.9%.
The Egyptian market drop follows an Israeli airstrike in Gaza that according to the enclave's health ministry killed at least 90 Palestinians in a designated humanitarian zone on Saturday. Israel said the attack had targeted Hamas military chief Mohammed Deif.
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