Stock markets in the Gulf ended mixed on Monday as investors await a likely cut to U.S. interest rates this week, with the Saudi index giving up early gains to conclude in negative territory.

The U.S. Federal Reserve is all but certain to cut rates on Wednesday, but the debate is over the size of the cut, with market bets inclining towards 50 basis points (bps), LSEG data showed.

Monetary policy in the Gulf Cooperation Council (GCC), which includes the UAE, often aligns with the U.S. Federal Reserve’s decisions as most of the regional currencies are pegged to the U.S. dollar.

Dubai’s main share index gained 0.3%, with Dubai Taxi Company advanced 7.5%, extending gains from the previous session.

The taxi operator on Friday announced the company had been awarded 300 new plates, expanding its fleet, at the latest auction held by Dubai’s Roads and Transport Authority.

In Abu Dhabi, the index closed 0.4% higher.

Saudi Arabia’s benchmark index dropped 0.3%, hit by a 1.7% fall in Alinma Bank and a 0.2% decrease in Al Rajhi Bank.

Most Gulf markets gain ground on big Fed rate cut bets

However, oil behemoth Saudi Aramco was up 0.2%.

Oil prices - a catalyst for the Gulf’s financial markets - edged higher as ongoing disruption to U.S. Gulf oil infrastructure balanced persistent demand concerns after a fresh round of Chinese data while investors await Fed rate decision.

The Qatari benchmark eased 0.1%, with Qatar Islamic Bank losing 0.3%.

The Qatari stock market saw limited movements, as investors in the region await this week’s central banks meetings, particularly the Federal Reserve’s, said Ahmed Negm Head of Market Research MENA at XS.com.

“The market is close to its high from earlier this year, benefiting from a rebound.”

Outside the Gulf, Egypt’s blue-chip index declined 0.8%, weighed down by a 1% fall in Commercial International Bank.

---------------------------------------- SAUDI ARABIA     fell 0.3% to 11,867 ABU DHABI        rose 0.4% to 9,389 DUBAI            added 0.3% to 4,395 QATAR            eased 0.1% to 10,449 EGYPT            lost 0.8% to 30,260 BAHRAIN          dropped 0.4% to 1,945 OMAN             down 0.3% to 4,731 KUWAIT           added 0.1% to 7,758----------------------------------------