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

The US personal consumption expenditures (PCE) price index - the Fed’s preferred inflation measure - rose 0.2% in July, according to Commerce Department data released on Friday.

Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.5% last month, the report showed. The data sets the stage for the Fed to likely begin easing monetary policy from this month. Money markets are pricing the Fed’s first 25 basis point (bp) cut of this cycle at its September meeting, with a 33% 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 US dollar.

Saudi Arabia’s benchmark index gained 0.4%, with aluminium products manufacturer Al Taiseer Group advancing 3.1% and Al Rajhi Bank closing 0.8% higher.

In Qatar, the index rose 0.3%, with Islamic lender Masraf Al Rayan increasing 1.5%. Outside the Gulf, Egypt’s blue-chip index rose 0.4%, led by a 1.7% gain in Talaat Mostafa Group.