Most major stock markets in the Gulf rose in early trade on Monday, continuing a rally sparked by interest rate cuts enacted by regional central banks, although the gains were limited by ongoing geopolitical tensions.

Last week, most Gulf central banks cut their key interest rates after the U.S. Federal Reserve decreased rates by half a percentage point citing “greater confidence” on inflation.

The Fed projected a further half-point rate cut by the year-end, a full point next year and a half-point trim in 2026.

Monetary policy in the Gulf Cooperation Council often aligns with the Fed’s decisions as most regional currencies are pegged to the U.S. dollar.

Saudi Arabia’s benchmark index gained 0.4%, with aluminium products manufacturer Al Taiseer Group rising 1% and ACWA Power Company advancing 3.9%.

Gulf bourses mixed on regional tensions

Qatar’s benchmark index rose 0.3%, led by a 0.7% increase in the Gulf’s biggest lender Qatar National Bank.

Dubai’s main share index added 0.3%, with MashreqBank climbing 6.3%.

The Israeli military launched a new wave of attacks against Hezbollah in southern Lebanon on Monday, it said in a statement.

In Abu Dhabi, the ADX General index was flat.