Most stock markets in the Gulf ended higher on Sunday, as US inflation data raised expectations of an interest rate cut this year, while an increase in crude prices also supported the gains.

US monthly consumer prices rose less than initially estimated in December, but underlying inflation remained a bit warm, data showed on Friday. The data revision did little to alter expectations for central bank rate changes.

US inflation data for January is due on Tuesday.

Most Gulf markets gain on optimism over de-escalation in regional tensions

Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by Fed policy because most regional currencies are pegged to the US dollar.

Saudi Arabia’s benchmark index edged 0.5% higher, helped by a 0.5% rise in Al Rajhi Bank and a 2% increase in Saudi Arabian Mining Co.

Separately, the kingdom is poised to sell more shares of energy giant Aramco, three people familiar with the matter said, which could boost the country’s funding and its aim to wean the economy away from oil.

Shares of Aramco were down 0.8%.

In Qatar, the index advanced 0.8%, buoyed by a 10% jump in Qatar Gas Transport (Nakilat), after QatarEnergy selected Nakilat to be the owner and operator of up to 25 conventional-size LNG carriers.

Elsewhere Qatar Navigation - which owns more than 36% in Nakilat - surged 9.9%

Oil prices - a catalyst for the Gulf’s financial markets - settled higher on Friday, up about 6% on a week-on-week basis, as worries about supply from the Middle East mounted and as extended outages tightened refined products markets.

Outside the Gulf, Egypt’s blue-chip index dropped 0.8%, as most of the stocks on the index were in negative territory including Commercial International Bank, which was down 1.2%.

SAUDI ARABIA up 0.1% to 12,209

QATAR gained 0.8% to 10,044

EGYPT lost 0.8% to 28,199

BAHRAIN was up 0.2% to 2,072

OMAN rose 0.4% to 4,563

KUWAIT advanced 1.2% to 8,058