Most Gulf markets retreat ahead of Fed rate cut decision | Reuters

Most Gulf markets retreat ahead of Fed rate cut decision | Reuters

Most stock markets in the Gulf ended lower on Tuesday, ahead of the U.S. interest rate decision that traders are betting may start with an outsized cut.

Investors remain solely focused on the Federal Reserve's two-day policy meeting that concludes on Wednesday, as chances have crept up in the past week in favour of a 50-basis-point rate cut.

Markets are now pricing in a 65% chance of a 50-basis-point cut versus 34% a week ago after media reports revived the prospect of more aggressive easing.

Monetary policy in the Gulf Cooperation Council (GCC), which includes the UAE, often aligns with the U.S. Fed's decisions as most of the regional currencies are pegged to the U.S. dollar.

The Qatari benchmark (.QSI), opens new tab dropped 0.4%, while Qatar Islamic Bank (QISB.QA), opens new tab and sharia-compliant lender Masraf Al Rayan (MARK.QA), opens new tab declined 1% each.

Investors exercised caution, engaging in profit-taking ahead of the Fed's rate decision, said Milad Azar, market analyst at XTB MENA.

Dubai's main share index (.DFMGI), opens new tab finished flat.

Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.2%, helped by a 3.1% rise in aluminium products manufacturer Al Taiseer Group (4143.SE), opens new tab.

According to analyst Azar, the potential rate cut by the Fed is expected to positively impact market sentiment, as it may prompt the Saudi central bank to adopt similar measures to enhance business conditions.

"Additionally, oil prices continue to play a definitive role in market performance."

Among other gainers, Saudi Arabian Mining Company (Ma'aden) (1211.SE), opens new tab jumped 6.6%, a day after it signed a non-binding agreement with Aluminium Bahrain (Alba) (ALBH.BH), opens new tab to pursue a potential business combination that would create a global powerhouse.

On Sunday, U.S.-based aluminium maker Alcoa said it would sell a 25.1% stake in its joint venture with Ma'aden to the company for about $1.1 billion in cash and stock.

In Bahrain, the index (.BAX), opens new tab advanced 3.8%, buoyed by a 20% surge in Alba.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab fell 0.3%, with Commercial International Bank (COMI.CA), opens new tab losing 0.5%.