Major stock markets in the Gulf rose in early trading on Thursday after benign US consumer inflation data overnight reinforced bets that the Federal Reserve would start cutting interest rates next month.

Traders remain convinced that the Fed will reduce rates on Sept. 18 for the first time in 4-1/2 years, but are split on whether policymakers will opt for a super-sized 50 basis-point reduction.

While inflation is slowing, signs it may remain sticky spurred a reduction of bets on a larger cut to 37.5% from about 50% a day earlier.

A major macroeconomic test looms later on Thursday with the release of US retail sales figures.

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

Saudi Arabia’s benchmark index gained 0.6%, with Dr Sulaiman Al Habib Medical Services rising 4% and MBC Group advancing 7.5%.

Gulf markets rise amid global stock rally

Dubai’s main share index edged 0.3% higher, helped by a 2.7% rise in public parking operator Parkin Company.

In Abu Dhabi, index added 0.2%. The number of companies that set up bases in Abu Dhabi’s financial centre ADGM increased by 31% in the first half of the year as the likes of Morgan Stanley joined a slew of other financial services firms moving to the oil-rich emirate.

The Qatari benchmark was up 0.1%, with Qatar Gas Transport Nakilat rising 1.8%.