Gulf stocks rise on hope of slower Fed rate hikes

Saudi woman walks at the Saudi stock market (Tadawul), in Riyadh
Saudi woman walks at the Saudi stock market (Tadawul), in Riyadh, Saudi Arabia March 9, 2020. REUTERS/Ahmed Yosri

Jan 29 (Reuters) - Stock markets in the Gulf ended higher on Sunday after cooling U.S. inflation lifted expectations the Federal Reserve would slow its pace of interest rate hikes.

The U.S. central bank's preferred gauge for inflation slowed in in December, the government reported on Friday, hitting its lowest level since September 2021.

The Fed will end its tightening cycle after a 25-basis-point hike at each of its next two policy meetings and then likely hold interest rates steady for at least the rest of the year, according to most economists in a Reuters poll.

Most Gulf currencies are pegged to the U.S. dollar, while Saudi Arabia, the United Arab Emirates and Qatar usually mirror U.S. monetary policy changes.

Saudi Arabia's benchmark index (.TASI) rose 0.2%, supported by gains in financial and energy sector stocks.

Saudi oil giant Aramco (2222.SE) inched up 0.3%, and the world's largest Islamic bank by market capitalization, Al Rajhi Bank (1120.SE) rose 1.6%.

The Qatari Stock index (.QSI) rose 0.4%, with most of its constituent stocks in positive territory.

The Gulf's biggest lender Qatar National Bank (QNBK.QA) continued its rally with a 0.9% gain and Commercial Bank (COMB.QA) continued its rally since Monday, settling 2.6% after it climbed 10% on Thursday.

The bank reported Tuesday a more than 22% rise in FY net profit, beating analyst's expectations.

Outside the Gulf, Egypt's blue-chip index (.EGX30) surged 3.7%, its highest intraday rise since November.

The index was helped by a 14.7% jump in Telecom Egypt (ETEL.CA) and Commercial International Bank Egypt (COMI.CA) jumping 6.1%.

Among other gainers, Alexandria Container And Cargo Handling (ALCN.CA) and Abu Qir Fertilizers And Chemical Industries (ABUK.CA) rose 2.4% and 0.5% respectively after they reported rises in half year net profit.

Reporting by Md Manzer Hussain; Editing by Toby Chopra

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