Most Gulf markets gain as US inflation moderates

Most stock markets in the Gulf rose on Monday with cooler-than-expected US inflation data supporting the view that the Federal Reserve could cut borrowing costs in the new year.

Last week's Commerce Department report showed US prices fell in November for the first time in more than 3-1/2 years, pushing the annual increase in inflation further below 3 per cent.

Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the decisions of the Federal Reserve, as most regional currencies are pegged to the dollar.

Saudi Arabia's benchmark index (.TASI) advanced 1.1 per cent, buoyed by a 2.6 per cent rise in Al Rajhi Bank (1120.SE) and a 1.8 per cent gain for auto rental firm Lumi (4262.SE).

Dubai's main share index (.DFMGI) eased 0.1 per cent, hit by a 0.9 per cent fall in blue-chip developer Emaar Properties (EMAR.DU).

The Dubai stock market was constrained within the trading levels of recent days, noted Daniel Takieddine, CEO MENA at BDSwiss.

"The market could be exposed to some price correction risks after a small rebound," he said.

The Qatari benchmark (.QSI) closed 0.5 per cent higher, rising for a seventh session, with Qatar Islamic Bank (QISB.QA) gaining 1 per cent and sharia-compliant lender Masraf Al Rayan (MARK.QA) up 2 per cent.

"The market could turn to price corrections if traders move to secure their gains," Takieddine said. "Uncertainty regarding developments in energy markets could also remain a source of risk."

Outside the Gulf, Egypt's blue-chip index (.EGX30) rose 1.6 per cent, led by a 3.6 per cent increase in top lender Commercial International Bank (COMI.CA).