Most Gulf markets gain on US rate cut prospects

Most Gulf markets ended higher on Sunday, extending gains from the previous session after data supported the likelihood of interest rate cuts by the U.S. Federal Reserve.

The U.S. personal consumption expenditures (PCE) price index - the Fed's preferred inflation measure - rose 0.2 per cent in July, according to Commerce Department data released on Friday.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.5 per cent last month, the report showed. The data sets the stage for the Fed to likely begin easing monetary policy this month.

Money markets are pricing the Fed's first 25 basis point (bp) cut of this cycle at its September meeting, with a 33per cent chance of a 50 bp reduction.

Monetary policy in the six-member Gulf Cooperation Council (GCC), including Saudi Arabia, 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> gained 0.4 per cent, with aluminium products manufacturer Al Taiseer Group <4143.SE> advancing 3.1 per cent and Al Rajhi Bank <1120.SE> closing 0.8 per cent higher.

In Qatar, the index <.QSI> rose 0.3 per cent, with Islamic lender Masraf Al Rayan <MARK.QA> increasing 1.5 per cent.

Outside the Gulf, Egypt's blue-chip index <.EGX30> rose 0.4 per cent, led by a 1.7 per cent gain in Talaat Mostafa Group <TMGH.CA>.

Egypt's net foreign assets (NFAs) rose by $220 million in July, remaining positive for a third straight month after having been deeply negative for more than two years, central bank data showed.