Most stock markets in the Gulf ended lower on Monday mirroring global declines as excitement over a potential U.S. interest rate cut in September faded.
Federal Reserve Chair Jerome Powell on Friday signalled a possible rate cut at the Fed's meeting next month, saying that risks to the job market were rising but inflation remained a threat, and that a decision wasn't set in stone.
Saudi Arabia's benchmark index (.TASI), opens new tab gave up early gains to edge 0.1% lower, hit by a 0.8% fall in the country's biggest lender Saudi National Bank (1180.SE), opens new tab.
Elsewhere, oil giant Saudi Aramco (2222.SE), opens new tab dropped 0.3%.
Powell's dovish nod improved sentiment, with markets wagering an 87% chance of a quarter-point cut on Sept. 17, as per CME's FedWatch tool and 53.3 basis points of cumulative reductions by year-end, according to LSEG.
The Fed's stance holds significant implications for Gulf economies, where most currencies are pegged to the U.S. dollar, making it an anchor for regional monetary stability.
The prospect of a rate cut next month could still support the market, said Osama Al Saifi, Managing Director for MENA at Traze.com. "Meanwhile, oil prices remain a risk; despite the rebound, the overall trend is still pointing to the downside, and geopolitical developments will likely influence the market's next move."
Dubai's main share index (.DFMGI), opens new tab gained 0.2%, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab rising 1%.
In Abu Dhabi, the index (.FTFADGI), opens new tab ended flat.
The Qatari index (.QSI), opens new tab lost 0.3%, weighed down by a 1.2% fall in the Gulf's biggest lender Qatar National Bank (QNBK.QA), opens new tab.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab was flat.
Egypt's central bank is likely to cut its key interest rates by 100 basis points on Thursday to support growth as inflation cools, a Reuters poll showed.
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